Retail, Reverse Overcome Lending Slump at Ocwen

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MORTGAGE EXPERT
3 · 01 · 18

Total mortgage originations weakened last year at Ocwen Financial Corp. But retail lending and reverse mortgage production both significantly increased. Also improving was delinquency.

Prior to income taxes, Ocwen had a $45 million loss during the final-three months of last year, according to its fourth-quarter earnings report.

Losses widened from $10 million in the same three months during 2016. But the West Palm Beach, Florida-based company cut its losses from $27 million the previous quarter.

Impacting fourth-quarter 2017 earnings were $50 million in
litigation and regulatory settlement-related expenses.

Most recently, servicing income was $29 million, lending profits were $3 million and corporate items were a $77 million charge.

From Oct. 1, 2017, through Dec. 31, Ocwen originated $0.702 billion in residential loans — including $0.437 billion in forward mortgages and $0.265 billion in reverse mortgages.

Business declined from $0.769 billion in the third quarter and
$1.286 billion in the fourth-quarter 2016.

Full-year 2017 originations amounted to $3.560 billion, tumbling from $5.014 billion.

Last year’s production included $0.983 billion in correspondent acquisitions, down 54 percent from 2016, while wholesale lending decreased a third to $1.555 billion. But the $1.022 billion in 2017 retail originations soared 83 percent.

The forward mortgage portion of 2017 originations was $2.518 billion, dropping 40 percent from the preceding year. But reverse mortgage production jumped 26 percent to $1.042 billion.

The acquisition of PHH Corp. announced Tuesday could add around $14 billion in annual production to Ocwen’s business based on the $3.462 billion in fourth-quarter originations reported by PHH. But PHH has been on a steep downward trajectory and is likely seeing a drop in first-quarter 2018 lending based on fourth-quarter 2017 rate locks — suggesting that the annual benefit to originations is much less than $14 billion.

The residential servicing portfolio was $177.289 billion as of year-end 2017, lower than $183.812 billion three months earlier and
less than $204.762 billion one year earlier.

Ocwen additionally reported a $2.064 billion subservicing portfolio.

Loans held for investment concluded 2017 at $4.716 billion,
growing from $4.460 billion at the end of the third quarter and $3.566 billion at the end of 2016.

Delinquency finished last year at 9.3 percent, improving from 9.4 percent as of Sept. 30, 2017.

Total staffing of 7,600 employees at the end of last year included 5,000 people in India and 600 in the Philippines. That left up to 2,000 U.S.-based employees,
down from 2,200 as of Sept. 30, 2017. Ocwen previously reported average U.S. employment at 1,390 for all of 2016.

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Mortgage Daily Staff

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