Ocwen Financial Corporation (NYSE: OCN) (“Ocwen” or the “Company”),
a leading non-bank mortgage servicer and originator, today
announced that the Company originated approximately $2.5 billion of
volume across all of its originations channels for the month of
August, which was nearly double the volume for the month of June.
Total funded volume for the first two months of the third quarter
was approximately $4.4 billion.
“Our team continues to generate strong progress on our growth
and profitability initiatives. We increased quarter-to-date
originations volume in August by 62% over the same period last
quarter and by 16X over the same period last year. This is a
testament to the dedication of our team, the benefits of our
multi-channel approach and the breadth of our product offering,”
said Glen A. Messina, President and CEO of Ocwen. “As demand for
mortgages remains high, we believe our multi-channel, profitable
originations platform combined with our specialty servicing and
subservicing expertise position us well to originate or acquire
assets at very strong returns. I am extremely proud of how well our
Originations business is performing, and I am excited for the
opportunities ahead.”
The Company’s originations platform comprised of both forward
and reverse mortgages achieved an annualized run-rate volume of $30
billion in August. While mortgage rates remain at historically low
levels, Ocwen’s steadily and rapidly growing Originations business
is primarily being driven by the actions the Company is taking to
grow its flow MSR and correspondent seller base, expand portfolio
recapture capacity and capabilities, and execute on its enterprise
sales strategy.
The Company grew its correspondent seller base by 23% from June
30th to 117 sellers in August and continues to sign new flow MSR
clients through the Fannie Mae Servicing Marketplace and Freddie
Mac Cash Release and Co-Issue Xchange programs. In August, the
Company increased its portfolio replenishment rate to 89%, up from
76% in the second quarter. Ocwen’s Enterprise Sales team continues
to gain momentum and the opportunity pipeline for its top 9
prospects includes more than $100 billion in subservicing, monthly
flow MSR and recapture services opportunities.
To support the Company’s growth strategy, Ocwen has increased
its originations headcount by approximately 40% since January 1,
2020 and plans to increase headcount by an additional 35% through
the balance of 2020. These actions will approximately double its
total originations staffing by year-end 2020 versus year-end 2019.
Notwithstanding the staffing increases to support originations
growth, the Company expects total staffing to decline by 4% by
year-end 2020 versus year-end 2019 resulting from its continuous
cost improvement initiatives.
“In addition to the great progress we are making in growing
originations, we are executing well on our key business priorities,
and our results through the third quarter to date demonstrate
continued positive momentum in our operating and financial
performance,” said Messina. “Our profitability trajectory continues
to improve, and we continue to drive productivity and operational
effectiveness to maintain a low-cost, well-controlled
infrastructure to maximize profitability. We also have sufficient
liquidity and access to capital to support our growth and fulfill
our role as a large-scale mortgage servicer. Our Servicing team is
doing a tremendous job supporting our customers, especially those
who have been impacted by the pandemic, and our employees globally
are performing at high level while working remotely. I am very
pleased with how well our teams are responding to the current
environment and delivering on our mission of creating positive
outcomes for homeowners, communities and investors.”
Additional business highlights include:
- Both GAAP income and adjusted pre-tax income were positive in
July and August and continue to trend favorably compared to second
quarter 2020.
- Previously identified balance sheet optimization actions and
total company liquidity position remain on track.
- Received $51.4 million of the estimated $65 million federal net
tax refunds in August, resulting from modifications to the tax
rules as part of the CARES Act. The Company expects to receive the
remaining balance in 2020, once its 2019 tax returns are filed and
pending IRS processing.
- Favorable trends in servicing advance levels compared to base
case levels with August balance of $855 million, an improvement
from the $901 million reported at the end of the second quarter
2020.
- Favorable trends in percentage of loans on forbearance in owned
MSR portfolio with August percentage of loans on forbearance of
7.9%, down 100 basis points from June 2020.
- Completed 24 virtual borrower outreach events nationally in
partnership with the NAACP to help customers who have been
negatively impacted by COVID-19.
- Refinanced $470 million of 2019 Ocwen Master Advance
Receivables Trust (“OMART”) term notes with new $475 million,
two-year term notes at improved terms and rates.
- CreditWatch with negative implications removed by S&P,
citing better-than-expected financial performance through the
second quarter 2020.
- Notified by the New York Stock Exchange (“NYSE”) on September
1, 2020 that the Company has regained compliance with the NYSE’s
continued listing standard rules.
The Company expects to provide its next business update and
release preliminary third quarter 2020 results in October.
About Ocwen Financial Corporation
Ocwen Financial Corporation (NYSE: OCN) is a leading non-bank
mortgage servicer and originator providing solutions through its
primary brands, PHH Mortgage and Liberty Reverse Mortgage. PHH
Mortgage is one of the largest servicers in the country, focused on
delivering a variety of servicing and lending programs. Liberty is
one of the nation’s largest reverse mortgage lenders dedicated to
education and providing loans that help customers meet their
personal and financial needs. We are headquartered in West Palm
Beach, Florida, with offices in the United States and the U.S.
Virgin Islands and operations in India and the Philippines, and
have been serving our customers since 1988. For additional
information, please visit our website (www.ocwen.com).
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements may be identified by a
reference to a future period or by the use of forward-looking
terminology. Forward-looking statements are typically identified by
words such as “expect”, “believe”, “foresee”, “anticipate”,
“intend”, “estimate”, “goal”, “strategy”, “plan” “target” and
“project” or conditional verbs such as “will”, “may”, “should”,
“could” or “would” or the negative of these terms, although not all
forward-looking statements contain these words. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain. We are in the midst of a period of capital
markets volatility and experiencing significant changes within the
mortgage lending and servicing ecosystem which have magnified such
uncertainties. Readers should bear these factors in mind when
considering such statements and should not place undue reliance on
such statements.
Forward-looking statements involve a number of assumptions,
risks and uncertainties that could cause actual results to differ
materially. In the past, actual results have differed from those
suggested by forward looking statements and this may happen again.
Important factors that could cause actual results to differ
materially from those suggested by the forward-looking statements
include, but are not limited to, uncertainty relating to the future
impacts of the COVID-19 pandemic, including with respect to the
response of the U.S. government, state governments, the Federal
National Mortgage Association (Fannie Mae), the Federal Home Loan
Mortgage Corporation (Freddie Mac, and together with Fannie Mae,
the GSEs), the Government National Mortgage Association (Ginnie
Mae) and regulators, as well as the potential for ongoing
disruption in the financial markets and in commercial activity
generally, increased unemployment, and other financial difficulties
facing our borrowers; impacts on our operations resulting from
employee illness, social distancing measures and our shift to
greater utilization of remote work arrangements; the adequacy of
our financial resources, including our sources of liquidity and
ability to sell, fund and recover servicing advances, forward and
reverse whole loans, and HECM and forward loan buyouts and put
backs, as well as repay, renew and extend borrowings, borrow
additional amounts as and when required, meet our MSR or other
asset investment objectives and comply with our debt agreements,
including the financial and other covenants contained in them;
increased servicing costs based on increased borrower delinquency
levels or other factors; our ability to collect anticipated tax
refunds, including on the timeframe expected; the future of our
long-term relationship and remaining servicing agreements with New
Residential Investment Corp. (NRZ); our ability to execute an
orderly and timely transfer of responsibilities in connection with
the previously disclosed termination by NRZ of the PHH Mortgage
Corporation (PMC) subservicing agreement, including our ability to
respond to any concerns raised by regulators, lenders and other
contractual counterparties in connection with such transfer; our
ability to timely adjust our cost structure and operations as the
loan transfer process is being completed in response to the
previously disclosed termination by NRZ of the PMC subservicing
agreement; our ability to continue to improve our financial
performance through cost re-engineering efforts and other actions;
our ability to continue to grow our origination business and
increase our origination volumes in a competitive market and
uncertain interest rate environment; uncertainty related to claims,
litigation, cease and desist orders and investigations brought by
government agencies and private parties regarding our servicing,
foreclosure, modification, origination and other practices,
including uncertainty related to past, present or future
investigations, litigation, cease and desist orders and settlements
with state regulators, the Consumer Financial Protection Bureau
(CFPB), State Attorneys General, the Securities and Exchange
Commission (SEC), the Department of Justice or the Department of
Housing and Urban Development (HUD) and actions brought under the
False Claims Act regarding incentive and other payments made by
governmental entities; adverse effects on our business as a result
of regulatory investigations, litigation, cease and desist orders
or settlements and related responses by key counterparties,
including lenders, the GSEs and Ginnie Mae; our ability to comply
with the terms of our settlements with regulatory agencies, as well
as general regulatory requirements, and the costs of doing so;
increased regulatory scrutiny and media attention; any adverse
developments in existing legal proceedings or the initiation of new
legal proceedings; our ability to interpret correctly and comply
with liquidity, net worth and other financial and other
requirements of regulators, the GSEs and Ginnie Mae, as well as
those set forth in our debt and other agreements; our ability to
comply with our servicing agreements, including our ability to
comply with our agreements with, and the requirements of, the GSEs
and Ginnie Mae and maintain our seller/servicer and other statuses
with them; our ability to fund future draws on existing loans in
our reverse mortgage portfolio; our servicer and credit ratings as
well as other actions from various rating agencies, including the
impact of prior or future downgrades of our servicer and credit
ratings; as well as other risks and uncertainties detailed in
Ocwen’s reports and filings with the SEC, including its annual
report on Form 10-K for the year ended December 31, 2019 and its
current and quarterly reports since such date. Anyone wishing to
understand Ocwen’s business should review its SEC filings. Our
forward-looking statements speak only as of the date they are made
and, we disclaim any obligation to update or revise forward-looking
statements whether as a result of new information, future events or
otherwise.
Note Regarding Non-GAAP Financial Measures
This press release contains references to non-GAAP financial
measures such as adjusted pre-tax income (loss), which adjusts GAAP
pre-tax income (loss) for certain income statement items we
categorize as “Income Statement Notables” and “Expense Notables.”
For additional information relating to the Company’s calculation of
adjusted pre-tax income and other information about the Company’s
use of non-GAAP financial measures, please refer to the Company’s
press release issued on July 16, 2020, available on the Company’s
website at www.ocwen.com (through a link on the Shareholder
Relations page).
Note Regarding Financial Performance
Estimates
This press release contains statements relating to our
preliminary third quarter financial performance to date. These
statements are based on currently available information and reflect
our current estimates and assessments, including about matters that
are beyond our control. We are operating in a fluid and evolving
environment and actual outcomes may differ materially from our
current estimates and assessments. The Company has not finished its
September or third quarter financial closing procedures. There can
be no assurance that actual results will not differ from our
current estimates and assessments, including as a result of third
quarter financial closing procedures, and any such differences
could be material.
FOR FURTHER INFORMATION CONTACT:
Investors: |
Media: |
June Campbell |
Dico Akseraylian |
T: (856) 917-3190 |
T: (856) 917-0066 |
E:
shareholderrelations@ocwen.com |
E: mediarelations@ocwen.com |
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