Ocwen Financial announces third quarter 2021 results

Picture credit: Barron's

● Net income of $22 million and earnings per share of $2.35  

  ● Pre-tax income of $10 million and adjusted pre-tax income of $37 million  

  ● Annualized quarterly after-tax ROE of 19% and annualized quarterly adjusted pre-tax ROE of 32%  

  ● $20 billion of new servicing additions and $20 billion of new subservicing awarded 

  ● 700 Flow and Correspondent sellers, up 2.5X year over year

WestPalm Beach, FL – (November 8, 2021) – Ocwen Financial Corporation (NYSE: OCN) (“Ocwen” or the “Company”),a leading non-bank mortgage servicer and originator, today announced its third quarter 2021 results and provided an update on the Company’s key business priorities.

The Company reported net income of $22 million and pre-tax income of $10 million for the third quarter of 2021, compared to a net loss of$9 million and a pre-tax loss of $11 million for the third quarter of 2020. Adjusted pre-tax income was $37 million for the quarter, compared to a $14 million adjusted pre-tax income in the third quarter of 2020, the eighth consecutive quarter of adjusted pre-tax income(see “Note Regarding Non-GAAP Financial Measures” below).

GlenA. Messina, President and CEO of Ocwen, said, “Our financial performance for the quarter exceeded our expectations and was a result of strong originations growth, solid operational execution and continued focus on cost reduction. Our multi-channel originations platform continues to execute very well and has delivered more than $100 billion in new servicing over the past three quarters. We are focuse don maintaining our profitable growth momentum by expanding our addressable markets through new products and services and continued client expansion. Servicing operating performance continues to exceed industry benchmarks in several key areas and we continue to focus on strategic technology deployment and process redesign to improve cost while delivering on our commitments to customers, clients and investors. We believe we have built a best-in-class, technology-enabled servicing platform with capacity for growth. The actions we have taken across our business are driving improved earnings power and business performance, and I am excited about the opportunities ahead.”

Third Quarter 2021 Operating and Business Highlights

● Total servicing additions up 77% (YoY)

  ● Correspondent channel volume up 179% (YoY); Texas Capital Bank correspondent lending business successfully integrated

  ● Consumer direct volume up 61% (YoY)

  ● Reverse originations volume up 86% (YoY)

● Reverse Mortgage Solutions reverse servicing platform acquisition completed in October

  ● Subservicing sales pipeline grew to more than $200 billion

  ● Deployed more than 50% of MSR Asset Vehicle LLC (“MAV”) investment commitment in only five months, ahead of schedule

  ● Increased total servicing portfolio to $248 billion, up 38% (YoY); prime servicing comprised 70% of total servicing UPB

  ● Continued to exceed industry benchmarks for certain call center performance metrics, as reported by the Mortgage Bankers Association (“MBA”)

  ● Delivering 20% more loss mitigation solutions for borrowers exiting COVID-19 forbearance plans, as compared to the industry average (based on MBA data for the period of September 2020 to June 2021)

  ● Notables of $27 million driven by unfavorable net MSR valuation adjustments due to rate and assumption updates, net of hedging (see “Expense Notables” and “Income Notables” below)  

  ● Steady liquidity of $236 million at September 30, 2021

  ● Book value per share of $51, up from $49 (YoY)