Ocwen absorbs Litton Loan acquisition costs in 4Q
Ocwen Financial Corp. (OCN) reported net income was down slightly in the fourth quarter of 2011, as it absorbed costs of the Litton Loan acqusition, but for the full year the mortgage servicer saw its income rise more than 100%.
For 4Q, Ocwen reported income of $9.7 million, or 8 cents a share, compared to net income of $9.9 million, or 9 cents a share, for the fourth quarter of 2010.
For the full year 2011, net income was $78.3 million, or 71 cents a share, versus $38 million, or 36 cents a share. Full year revenue in 2011 was $495.9 million, up 38% from 2010.
Analysts surveyed by Yahoo Finance estimated Ocwen would earn 30 cents a share for the quarter and $1.05 for the year.
"The Litton acquisition continues to meet or exceed our expectations," said Ron Faris, president and CEO. "The integration was completed on Nov. 1 as planned. Particularly gratifying has been our solid delinquency management performance to date on the Litton loans, and we should see further progress in coming months as our modification programs take hold."
During the quarter, Ocwen entered into acquisition agreements that will add about $31 billion of unpaid principal balance to its servicing portfolio and converted approximately $11 billion from subservicing to owned servicing.
It also completed a follow-on public offering of 28.8 million shares of common stock for net proceeds of $354.4 million to support pending and potential future servicing acquisitions.
Ocwen said it reduced mortgage delinquencies from 28.7% on Sept. 30, 2011, to 27.9% on Dec. 31, 2011.
It also completed 18,663 loan modifications with the government's Home Affordable Modification Program accounting for for 16% of completed modifications.
Ocwen said it increased loan modification offers in the fourth quarter of 2011 by 23% over the third quarter of 2011 to a total of 21,566.
On Feb. 10, Ocwen entered into an agreement to sell to Home Loan Servicing Solutions the right to receive the servicing fees relating to approximately $16 billion of UPB.