Ocwen Financial Corporation (NYSE: OCN) posted a $32.6 million loss in the first quarter of 2017, but despite that news — and its recent raft of regulatory issues — CEO Ron Faris struck an upbeat and at times defiant tone on its quarterly earnings call Wednesday morning.
That loss does represent an improvement from the first quarter of 2016, when Ocwen finished $111.2 million in the red, and Faris pointed out that the company actually turned a profit on its servicing and lending operations of $3 million and $1 million, respectively.
“Obviously, recording a loss is not where we want to be, but it is worth noting a significant improvement,” Faris said.
The West Palm Beach, Fla.-based servicer dedicated a significant part of its presentation to the state and federal regulatory actions that dominated industry headlines last week. Starting with the states, Faris said that his company is working with them individually and as a group to reach a potential solution. Alluding to the requests for emergency restraining orders that Ocwen filed against Massachusetts and Illinois, Faris noted that any individual actions serve the dual purpose of potentially halting regulatory restrictions, and buying Ocwen more time to work toward a permanent solution.
Faris said he doesn’t anticipate that state bans on originations and the acquisition of new mortgage servicing rights will lead to long-term financial difficulties for Ocwen, but warned shareholders that the actions could lead to short-term dips in origination figures. He also cited past successes in shedding regulatory chains in California and New York as proof that Ocwen can beat its current charges.
The company continues to face a servicing-rights acquisition ban in New York despite a recent agreement that saw the removal of a state-ordered independent monitor on its operations. In response to a question from a listener, Faris said Ocwen can’t comment on a timeline for when the Empire State might lift the ban.
Turning to the Consumer Financial Protection Bureau, which filed a federal lawsuit against Ocwen two weeks ago, Faris rattled off a list of scenarios in which he claimed the company had been wrongfully accused of acting improperly, including a foreclosure on a vacant home with an owner who had only made 26 of 84 total possible payments, or a troubled borrower who declined multiple Ocwen overtures regarding loan modifications.
“It makes no sense that the CFPB deems our actions to be inappropriate,” Faris said,
Ocwen services reverse mortgages under its Liberty Home Equity Solutions subsidiary, which was generally not included in the federal and state actions, as RMD reported last week. Ocwen’s reverse business wasn’t mentioned during the call, and only makes brief cameo appearances in its 8-K filing.
Written by Alex Spanko
