Ocwen Profits Skyrocket on New Products, Expansion
West Palm Beach, Fla.-based Ocwen Financial Corporation (OCN) earned $17.8m ($0.26 per share) in Q209, an improvement over a loss of $2.7m in Q208. Revenue growth and cost reduction of Ocwen Solutions, the firm’s mortgage services and financial services and technology products division led to a nearly 200% surge in profits. New revenue was earned from expanded geographical reach and new default servicing products. The mortgage servicer said the company’s turnaround came even though modifications from the Home Affordable Modification Program (HAMP) declined servicing and subservicing fees $8.1m. Ocwen also spent $2.3m to execute the spin-off of its Altisource mortgage portfolio division. Per HAMP guidelines, all pending mortgage modifications were reviewed for eligibility in the program, creating 61% decline in completed modifications from Q208. Ocwen has extended more than 2,600 HAMP-based modification offers since April. As HAMP is further implemented, Ocwen expects its modification volume to return. “We have been exceptionally busy this quarter as we re-focus our efforts on growing our servicing business,” said Ocwen chairman and CEO William Erbey. “With our solid liquidity position and excess financing capacity, we are well positioned to grow through acquisitions of servicing portfolios.” Write to Austin Kilgore.