Ocwen Financial Corp. (OCN) said Thursday that it lost a net $3.7 million -- or 6 cents per share -- in the fourth quarter 2008, after posting a $15.6 million profit in the third quarter. The loss -- still below the same-quarter 2007 loss of $6.9 million- -- was driven by "fair value adjustments for unrealized losses on trading securities and investments," company officials said in the earnings statement. Ocwen Financial posted a profit for the full-year 2008, reporting it had earned $17.9 million, or 29 cents per share, in the year. The West Palm Beach, Fla.-based company maintains a large non-prime servicing platform and a substantial mortgage and finance technology solutions business. CEO William Erby stressed Ocwen’s recent strong focus on loan workouts, with the company reporting it had modified 60,873 loans in all of 2008, "obtaining a better outcome for investors than the alternative of foreclosure," and continuing its recent campaign of keeping borrowers in their homes. The company's mortgage services income declined $2.1 million from the fourth quarter 2007, primarily due to "the continued deterioration of the mortgage origination market" and somewhat offset by increased demand for the company's default services. Continued fourth-quarter operations for Ocwen's servicing segment represented a 44 percent increase over the third quarter 2008, as well as a $5.4 million increase over the year-ago quarter. Total reductions in operating expenses of $7.7 million largely drove the strong quarterly performance. Collateral in the company’s servicing portfolio continues to deteriorate, reflecting the national state of housing. Ocwen said that non-performing assets reached 24.3 percent of the servicing portfolio — or $9.76 billion — during the fourth quarter; that’s up substantially from 19.6 percent one year ago, and an increase from 22.7 percent of the the prior quarter's portfolio, despite all of the servicer’s loan workouts. "We are encouraged by the government's announcement on March 3, 2009 that securities backed by servicer advances are under consideration for inclusion in the expanded TALF program," company officials said in the earnings statement. "To the extent stable long-term financing for advances becomes available, we will consider acquiring existing servicing platforms where we can leverage our low operating costs and ability to reduce delinquencies." The company, which had been rumored for months to be discussing a possible spin-off, announced in mid-December it would spin off its technology and business process outsourcing business line, separating it from its core subprime mortgage servicing operation. Company officials confirmed in December they were targeting Q2 2009 for the spin-off, with current shareholders receiving shares of the new publicly-traded company as part of the transaction. Company stocks were up 1.3 percent to $9.12 in trading early Friday. Write to Diana Golobay at diana.golobay@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.