Ocwen Financial Corp.'s net loss narrowed 46% from a year earlier to $3.7 million ($0.06 per share) last quarter as the servicer of subprime mortgages cut operating expenses.
The West Palm Beach, Fla. company said it incurred $14.7 million of paper losses, after taxes, on trading securities and investments. Income from the core servicing business jumped 44% to $18 million, as the unit's operating expenses fell 16% to $40 million.
However, revenues from the business declined 6.7% to $75.7 million as faster prepayment speeds caused the servicing portfolio to contract 24%, to $40 billion of loans. William Erbey, Ocwen's chairman and chief executive, said that in December and January it renewed $500 million of credit lines that finance servicing advances.
The company is "developing advance financing facilities with new private sector providers," he said. Ocwen has also joined an industry coalition that is seeking to have the government-sponsored enterprises guarantee such advances and the Federal Reserve Board's Term Asset-Backed Securities Loan Facility finance them, Erbey said.