Ocwen delivers $18M profit in 2021

Lender and servicer lost $2M in the fourth quarter

Nonbank mortgage lender and servicer Ocwen Financial Corporation improved its performance in 2021, despite a deterioration in its earnings during the last three months of the year.

The company reported on Friday a $18 million profit in 2021. Ocwen posted a net loss of $40 million in 2020.

For the full year, the company’s servicing portfolio grew 42% to $268 billion. Meanwhile, the firm’s consumer direct origination volume increased 93% in 2021 to $2.8 billion. Reverse originations, boosted by the acquisition of Reverse Mortgage Solutions, increased from $942 million in 2020 to $1.5 billion in 2021.

The performance last year was consistent with the company’s expectations, according to Glen Messina, president and CEO. “We remain focused on prudent growth by expanding our client base, products, services and addressable markets,” the executive said in a statement. He added the company will pursue competitiveness through scale and low cost. 

The company reported a $2 million loss in the fourth quarter, reversing a $21.5 million profit in the previous three months, partially due to the RMS platform’s acquisition. In the fourth quarter of 2020, the company’s losses were higher, at $7 million. 

In October, Ocwen Financial Corporation announced its subsidiary PHH Mortgage Corporation completed the acquisition of RMS. The transaction had a $15 million impact in expenses in the fourth quarter, increasing the total operating expenses to $174 million in the period, a 21% year-over-year increase. 

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Despite the rise in expenses, Messina said the deal will bring returns, and soon.

“With the completion of the RMS platform acquisition, we believe we are uniquely positioned in reverse mortgage and are targeting at least 60% growth in our reserve servicing portfolio in the first half of this year,” he said. 

Ocwen had $43 billion of new servicing additions in the fourth quarter, including $32 billion in subservicing. The company said the RMS platform acquisition is projected to add $13 billion in unpaid principal balance in the first semester of 2022.  

Clarification: Ocwen’s customer direct revenue increased 93% to $2.8 billion in 2021.

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