Ocwen Financial Corp., a major buyer of MSRs the past two years, earned $9.7 million in the fourth quarter, a slight decline from the same period a year earlier.
But the specialty servicer blamed its weaker results on $31.3 million of costs tied to its 4Q11 purchase of Litton Loan Servicing, Houston. If not for the charge – and certain foreign exchange costs – it would've posted pre-tax earnings of $53.4 million.
The Atlanta-based company has a large overseas workforce in India. In trading Thursday its stock price was down slightly to $15.70.
Flush with cash and borrowing facilities, the company is currently reviewing for possible purchase roughly $300 billion of mortgage servicing packages.
At yearend it controlled $102 billion of MSRs or related contracts, making it the nation's 12th largest servicer, according to figures compiled by ASR sister publicaiton National Mortgage News and the Quarterly Data Report.
The firm is negotiating with an affiliate company, Home Loan Servicing Solutions, regarding that unit's right to receive servicing fees on $16 billion of MSRs. (HLSS – which is controlled by Ocwen CEO Bill Erby – has filed to go public.)
Ocwen said it reduced the delinquency rate on its portfolio to 27.9% in 4Q11 from 28.7% in 3Q11. It also modified 18,663 loans, a 19% sequential improvement.
Although the company is based in Atlanta, a large chunk of its back office work force is housed in Bangalore and Uruguay.