December 2016 - Getting Serious About Diversity

TheMReport β€” News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SERVICING THE LATEST LOCAL EDITION THE LATEST aligning compliance guidelines with business unit metrics for independent compliance testing," Morningstar stated. The last time Morningstar rated Ocwen was February of 2015. Ocwen remains subject to continuous compliance review by a third-party auditor as a result of settlements with the New York Department of Financial Services and the California Department of Business Oversight that occurred in 2014. "The cost of ongoing regula - tory compliance has been a drain on OFC's profitability," the Morningstar announcement stated. "However, compliance costs have significantly declined in recent months as the com - pany nears the expiration date of the NYDFS and DBO consent orders and National Mortgage Settlement monitoring in the sec- ond and third quarters of 2017." Morningstar also stated that Ocwen is a top performer in the Treasury's Making Home Affordable Program "and is currently a leader in that pro - gram's streamlined modification program." As of June 30, Ocwen serviced a portfolio of approximately 1.5 million residential first- and second-lien mortgage loans with an aggregate unpaid principal balance of approximately $224 billion. The portfolio includes 1.2 million non-agency residential mortgage loans, with a UPB of $169 billion; and 351,407 agency residential mortgage loans, with a UPB of $53 billion. Ocwen's Financial Fortunes Turn Around in Q3 THE LENDER CREDITS THE MAKING HOME AFFORDABLE PROGRAM, OPERATING COST REDUCTIONS, AND MORE FOR INCREASED REVENUES. GEORGIA // Ocwen Financial Corp., headquartered in Atlanta, recently announced its first quar- terly profit in more than a year, posting a net income of $9.5 mil- lion for the third quarter of 2016. The reported $9.5 million net income was welcome news for Ocwen, which endured losses of $111 million and $87 million in the first and second quarters of 2016, respectively. One huge difference for Ocwen was in the servicing segment, which recorded a pre- tax income of $33.2 million in Q 3β€”an improvement of $47.9 million over the second quarter. Ocwen attributes the turnaround to strong performance under the government's Making Home Affordable streamline modifica- tion program, significant operat- ing cost improvements, gains from the execution of servicing "clean up" call rights and MSR sales, and continued reductions in advances and match funded advances. "We are very pleased with the financial result this quarter, re - cording our first quarterly profit since the second quarter of 2015," said Ron Faris, President and CEO. "We saw terrific execution from our servicing team, which completed more than 21,000 modifications in the quarter, suc - cessfully delivered $12.0 million of gains on servicer 'clean up' call rights transactions and contin- ued to reduce operating costs. Additionally, our Automotive Capital Services business con- tinues to grow and move closer to profitability. Our mortgage lending business saw growth in origination volume, but we must improve margins." The year 2016 brought a new hope for Ocwen as Phyllis Caldwell assumed the role of independent chairwoman for the company in March. With the change in leadership signaling a new era in the company's history, Ocwen hopes it can leave its troubled past behind. "We remain focused on put - ting legacy matters behind us," Caldwell said. "We received the much awaited Standard & Poor's upgrade to our servicer ranking in August. We continue to progress toward a potential resolution with the California Department of Business Oversight to end the cur - rent consent order and associated third party auditor before year-end. We are also continuing to achieve benchmarks and meet necessary conditions that we believe will result in the other remaining third- party monitorships concluding at their scheduled end dates." Caldwell continued, "I am also proud to say that despite some of the challenges of the past, we have continued to invest in our corporate culture, risk management, compliance, service excellence and technology. We have maintained our leadership in helping families struggling with their mortgage payments as evidenced by our number one status in the HAMP program. We are also making progress in building our new asset generation businesses. Most importantly, the entire Ocwen team is devoted to working in the best interest of homeowners and investors to deliver positive outcomes." LOCAL EDITION SERVICING

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