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Losses Continue at Ocwen, Originations Down

At a time when most of the industry is seeing origination gains, Ocwen Financial Corp. had a decline. Losses continued, and staffing was diminished, but delinquency improved.

Ocwen’s second-quarter earnings report reflected more than $28 million in losses before income taxes during the three months that finished on June 30.

The West Palm Beach, Florida-based company cut its losses from one year previous, when they came in $42 million. Earnings, however, swung from a $5 million first-quarter 2018 profit.

“We are facing certain challenges and uncertainties that could have significant adverse effects on our business, financial condition, liquidity and results of operations,” the report stated. “The ability of management to appropriately address these challenges and uncertainties in a timely manner is critical to our ability to operate our business successfully.”

Residential loan originations totaled $0.370 billion, falling from $0.377 in the first quarter and plunging from $0.975 billion in the second-quarter 2017.

The decline in business contrasts that of the rest of the industry — which mostly has been reporting solid gains.

Full first-half volume amounted to $0.750 billion.

Second-quarter 2018 production consisted of $0.216 billion in forward mortgages, about the same as the previous quarter, and $0.154 billion in reverse mortgages, dropping 6 percent.

Refinance share during the entire first-six months of 2018 on the forward portion of originations was 100 percent.

The primary servicing portfolio ended the first half at $165.527 billion. Ocwen has reduced the portfolio from $171.596 billion the preceding period and $190.929 billion at the same point in 2017. Most recently, the total included $94.730 billion on loans where the mortgage-servicing rights have been sold to New Residential Investment Corp.

Another $1.600 billion was subserviced as of last month.

On Ocwen’s balance sheet were $5.144 billion in loans held for investment, up from $4.988 billion as of March 31 and $4.224 billion as of mid-2017.

Delinquency finished June 2018 at 8.3 percent, down from 9.0 percent three months earlier and 9.6 percent one year earlier.

Based on staffing data provided by Ocwen, Mortgage Daily estimates that U.S. headcount was approximately 1,600 people as of mid-2018. Ocwen cut its payroll from 1,854 the prior quarter and 2,400 a year prior.

An additional 4,500 employees were located in India as of last month, and 500 were in the Philippines.

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