A Profit for Ocwen in 4Q19 but a Contract Loss as Well email@example.com
Ocwen Financial, which has been losing money for several years, posted a $34.9 million profit for the fourth quarter, thanks in large part to an interest rate-driven markup on the value of its servicing contracts.
In this case, the gain on its mortgage servicing portfolio totaled $31.1 million.
In 3Q19, the nonbank lost $42.8 million. For all of 2019, the lender/servicer spilled $142.1 million of red ink, more than double what it lost the year prior.
Like many mortgage firms, the asset value of its servicing portfolio rises and falls depending on the direction of interest rates.
For several years now, Ocwen has been cutting costs while trying to reengineer its business, putting a greater emphasis on correspondent loan acquisitions and owned-servicing as opposed to being a subservicing vendor. In the fall of 2018 it bought PHH Corp., a competitor of sorts.
Although Ocwen’s profit was good news for the long-struggling firm, it also disclosed that New Residential Investment Corp., a large subservicing client, is terminating its contract, which includes processing chores on $42.1 billion of loans.