Altisource Portfolio Solutions (ASPS) saw its profit soar 10% in the second quarter as servicers relied more heavily on the company’s REALServicing platform. Financial firms use the platform to manage servicing assets, including all of those that are newly boarded.
The Luxembourg-based firm posted a profit of $30.9 million, or $1.25 a share, a 10% jump from 2Q 2012 levels.
Altisource attributes its second-quarter revenue and profit growth to the initial referral of non-GSE Homeward loans boarded by Ocwen Financial Corp (OCN) onto the REALServicing platform.
"Including Ocwen's recently announced agreement to purchase $78 billion of mortgage servicing rights from OneWest Bank, the number of non-GSE loans on which Altisource earns revenue is expected to be 65% higher in the fourth quarter of 2013 compared to the second quarter of 2013," the company wrote in its earnings report.
Combining OneWest's assets with Ocwen’s ResCap portfolio creates a solid revenue stream for Altisource in the future.
"We are encouraged by Ocwen's recently announced agreement to purchase mortgage servicing rights from OneWest which, along with the ResCap portfolio, will drive meaningful default and technology related revenue growth to Altisource," said Altisource Chairman William Erbey.
"Given the traction we see in our strategic initiatives along with Ocwen's ability to acquire additional mortgage servicing rights, Altisource's long term growth prospects are very bright."
In April, Altisource finalized its ResCap fee-based business transaction with Ocwen for an aggregate purchase price of $128.8 million.
The average number of loans Ocwen boarded onto the REALServicing platform totaled one million in the second quarter, up from 800,000 last year.
Altisource expects Ocwen to board another 619,000 non-GSE loans onto its REALServicing by the end of this year.
Carter Malloy, managing director with Stephens Inc., adjusted Altisource’s 2014 earnings-per-share from $8.82 to $8.72, basing the change on assumptions that more ResCap and OneWest loans will be boarded this year.