Ocwen
Ocwen Financial just can’t catch a break. The nation’s 13th largest servicer finally posted a decent quarterly profit this week and then stocks tanked (big time) and interest rates plunged. If the quarter were to end today, the asset mark down on its servicing portfolio would not be pretty…
Then again, Ocwen is not alone when it comes to MSR markdowns. When rates dive, MSRs become less valuable from an accounting standpoint. Hedging the asset helps but not all owners of servicing rights hedge their positions.