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Ocwen Mortgage Originations Bounce Up

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After falling to a four-year low, quarterly mortgage originations bounced higher at Ocwen Financial Corp. Servicing and staffing both saw a decline.

The West Palm Beach, Florida-based financial services firm reported a $96 million loss before taxes during the period from April 1 through June 30.

Losses at Ocwen dipped from $102 million in the first quarter but worsened compared to the second-quarter 2015 — swinging from a $13 million profit.

These details and more were disclosed by the Ocwen in a Form 10-Q filing with the Securities and Exchange Commission.

“While we still have more to do on various fronts, we are moving towards returning to profitability in our core operations while growing our asset-generation activities,” Ocwen President and Chief Executive Officer Ron Faris said in a written statement.

A $15 million second-quarter 2016 servicing loss was partially offset by an $8 million lending profit.
“Corporate items and other” accounted for the remaining $89 million loss.

Home-lending volume came to $1.320 billion during the most-recent three-month period. The total included $1.113 billion in traditional loans and $0.207 billion in reverse mortgages.

Although mortgage production picked up from the prior quarter’s $0.979 billion — first-quarter 2016 originations were the slowest for Ocwen since 2012.

Business
was minimally slower than the 8,000 units funded for $1.326 billion in the second quarter of last year.

For the six months that have elapsed so far this year, volume amounted to $2.299 billion.

Second-quarter 2016 business included $0.134 billion in retail originations, $0.552 billion in wholesale lending and $0.634 billion in correspondent acquisitions.

Interest rate lock commitments were valued at
$15 million as of June 30, 2016, creeping up from $14 million the previous quarter.

Earnings material indicate that a new self-serve portal has been launched to generate leads at lower costs.
In addition, a new automated correspondent bid tool is intended to provide a
better experience and price discovery for sellers.

Ocwen said it serviced $216.556 billion in residential loans as of June 30, 2016, a continued reduction from around 1.5 million loans for $223.731 billion serviced as of three months earlier and $267.996 billion as of 12 months earlier.

The sub-servicing portfolio finished last month at $12.720 billion.

Reverse mortgage loans on the balance sheet totaled $3.058 billion as of mid-2016,
growing from $2.771 billion three months prior and $2.097 billion one year prior.

Delinquency was 11.9 percent as of June 30, 2016, an improvement over the 13.0 percent rate as of the end of March. The improvement was “primarily driven by higher collections and loss mitigation efforts.”

Representation-and-warranty obligations closed out the first half at $33 million, edging higher than $32 million at the end of the first quarter but well down from $87 million one year prior.

The report indicated that average U.S. employment was 1,462 in the second-quarter 2016,
declining from 1,540 in the previous period. The average was 2,066 during the same period in 2015.

Also as of the latest period, average offshore employment was 6,012.

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