Nonbank mortgage lender and servicer Ocwen Financial Corporation reported a $58 million profit in the first quarter, according to preliminary quarterly results released Thursday.
The company greatly bettered the $2 million loss in the fourth quarter of 2021 and increased its profits by a factor of six compared to the $8.5 million in net income reported in the first quarter of 2021.
“Our originations and servicing businesses are performing as expected with the rapid increase in interest rates,” said Glen Messina, president and CEO, in a statement. “MSR fair value gains more than offset a pre-tax loss in forward originations.”
Ocwen added $20 billion to its servicing portfolio during the first quarter. The total servicing unpaid principal balance (UPB) was at $275 billion as of March 31, 2022, up 3% compared to December 31, 2021.
The company did not report origination figures with the preliminary quarterly earnings report – the lender will include the volumes in the final results expected to be reported on May 5.
However, Messina said the company had a pre-tax loss in forward originations. “We are taking the necessary actions to address lower industry forward mortgage origination volume and margins, including expense reduction and right-sizing actions, while prioritizing higher margin products and services,” he said.
Meanwhile, Ocwen’s origination volume and profitability in the reverse product remained strong and consistent with the fourth quarter of 2021, the executive said.
In October, Ocwen Financial Corporation announced its subsidiary PHH Mortgage Corporation completed the acquisition of Reverse Mortgage Solutions to boost its reverse originations.
Earlier this month, a U.S. Court of Appeals ruled that most complaints in the Consumer Financial Protection Bureau’s attempt to revive a mortgage servicing misconduct lawsuit against Ocwen are barred because of a 2014 consent order. The bureau can only advance claims for alleged misconduct that are not covered by the terms of consent judgement, the Court said.
