Punctuated by substantial layoffs and a significant net loss, the third quarter of 2015 was a tough one for Ocwen Financial Corporation.
In late September, toward the end of the quarter, the Atlanta-based servicer announced it was cutting about 300 jobs, or one-tenth of its U.S. workforce, from its Waterloo, Iowa, office—and that it would be leasing out half of that 155,000 square-foot facility.
On Wednesday, Ocwen reported a net loss of $66.8 million for the third quarter in 2015 compared to a net loss of $75.3 million for the same quarter a year earlier. The servicer also reported a 21 percent year-over-year decline in generated revenue, down to $405 million, in Q3 2015, and a dropoff in cash flow from operating activities from $349 million in the third quarter of 2014 to $239 million in Q3 2015.
The good news for Ocwen is that the company ended Q3 with more than $731 million in available liquidity, including $459 million of cash on hand, and brought the amount of reduced corporate debt by 47 percent, or $812 million, year-to-date in 2015 by the end of the third quarter.
“In the third quarter, we continued to make progress on our strategic and operating initiatives.”—Ron Faris
“In the third quarter, we continued to make progress on our strategic and operating initiatives,” said Ron Faris, CEO of Ocwen. “Our asset sale strategy has succeeded in generating proceeds and gains for the Company, enabling us to reduce leverage and focus on simplifying our operations.”
Among Ocwen Financial’s accomplishments during the third quarter:
- Launched “Owen Cares, a website focused on helping distressed borrowers
- Encouraged struggling homeowners to seek assistance by continuing its joint initiative with the NAACP, “Help and Home for Homeowners”
- Completed 19,470 loan modifications. About half of those were completed through the government’s Home Affordable Modification Program (HAMP). About 45 percent of the modifications completed included some principal reduction.
Also for Ocwen in the third quarter, the delinquency rate on Ocwen-serviced loans climbed slightly from 13.0 percent to 13.1 percent, primarily due to sales and transfers of performing agency loans.
“We are making solid progress in developing our lending capabilities including expansion of our product offerings,” Faris said. “Additionally, we are progressing as expected on the cost improvement initiatives that we laid out in the third quarter and anticipate identifying additional opportunities to reduce our operating costs. We remain committed to investing in our risk, compliance and technology infrastructure, and delivering best-in-class service to our customers.”