Ocwen Financial Corporation, an Atlanta-based financial services holding company, reported a net loss of $128.5 million for 2017, and a pre-tax loss of $45.3 million in Q4 alone. This comes the day after the announcement that Ocwen was purchasing PHH Corporation for $360 million in cash.
In spite of the reported net loss for 2017, Ocwen’s financial results were actually an improvement over their 2016, when the company reported a net loss of $199.4 million. That amounts to an annual uptick of $70.9 million. According to Ocwen’s report, the company generated $1.2 billion in revenue and $412 million in cash flows from operating activities in 2017. Ocwen reports they ended the year with $260 million in cash.
Ron Faris, President and CEO of Ocwen, called 2017 “another challenging year.” However, he highlighted Ocwen’s progress “on a number of fronts, reducing our year over year loss by $70.9 million and helping over 45,000 struggling families retain their home through affordable loan modifications. We are also in an improved cash and liquidity position following the closing of our amended agreements with New Residential Investment Corp. in January 2018.”
Faris added that “Our servicing business continued to perform well despite the challenges posed by continued portfolio runoff and posted its sixth consecutive quarter of pre-tax income."
Ocwen reported that the Q4 pre-tax loss of $45.3 million was affected by numerous factors, “the largest of which was $49.8 million in litigation and regulatory settlement-related expenses. Excluding these settlement-related expenses and other adjusting items that largely offset,” the report states, “the Company had an adjusted pre-tax income of $4.0 million.”
Ocwen’s servicing business reported $28.6 million of pre-tax income for Q4 2017 and $46.7 million of pre-tax income for the full year. That’s up $43.3 million over 2016.
During 2017, Ocwen completed 45,682 loan modifications, of which 27.9 percent were Home Affordable Modification Program (HAMP) modifications. The company also reported a slight decrease in delinquencies. Between September 30, 2017, and December 31, 2017, delinquencies dropped from 9.4 percent to 9.3 percent.
Ocwen’s full release detailing their 2017 and Q4 2017 financial results can be found here.