Ocwen Losses, Servicing and Originations Down

Mortgage News

Mortgage Daily Staff

                                                 February 23, 2017

Ocwen Financial Corp. cut its quarterly losses. Also retreating was residential lending volume and the mortgage servicing portfolio.

There was a $10 million pre-tax loss during the final three months of last year at the West Palm Beach, Florida-based company.

The results, in addition to other operational and financial metrics, were provided in Ocwen’s fourth-quarter 2016 earnings report.

Earnings swung from a $2 million profit in the prior three-month period. But losses subsided from $129 million in the final quarter of 2015.

Residential loan originations, including forward mortgages and reverse mortgages, totaled $1.286 billion during the most-recent quarter. Business fell from $1.429 billion in the third quarter but increased from $0.987 billion in the final quarter of 2015.

Full-year 2016 originations
amounted to $5.014 billion — including $4.188 billion in traditional forward loans and $0.825 billion in reverse mortgages. The previous year, production totaled $4.741 billion and was made up of $3.931 billion in forward loans and $0.810 billion in reverse mortgages.

On the forward portion of last year’s business, retail originations accounted for $0.423 billion, wholesale lending was $2.035 billion and correspondent acquisitions totaled $1.730 billion.

Last year’s refinance share was 65 percent, down from 78 percent in 2015.

Including loans serviced for New Residential
Investment Corp., the servicing portfolio was $204.762 billion as of year-end 2016. At the close of the prior year, the portfolio was $237.202 billion.

In addition, another $4.330 billion in loans were sub-serviced as of the end of last year.

At the conclusion of 2016, there were $3.566 billion in reverse mortgages on the balance sheet,
more than $3.340 billion as of three months earlier and $2.488 billion one year earlier.

Last year’s average U.S. employment was
1,390 people, fewer than 1,938 in 2015.

Another average 6,062 employees were located offshore.

The report indicated that Ocwen is currently negotiating a settlement with the Consumer Financial Protection Bureau over its servicing practices and technology. The potential settlement is
tied to a 2014 examination. Ocwen said it has accrued $12.5 million for a potential consent order.

“If we are unable to agree upon a resolution, the CFPB could bring an adversarial enforcement action against us,” Ocwen stated in its Form 10-K filing. “An adversarial enforcement action could be costly to defend, could adversely affect our reputation and could adversely impact our relationships with counterparties, including lenders, among other consequences. Accordingly, whether or not we reach an agreement after discussions with the CFPB, it is possible that we could incur losses that materially exceed the amount accrued as of Dec. 31, 2016, and the resolution of matters raised by the CFPB concerns could have a material adverse impact on our business, reputation, financial condition, liquidity and results of operations.”

Mortgage Daily Staff

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