Ocwen Financial Corporation Announces Second Quarter 2010 Financial Results
SECOND QUARTER BUSINESS PERFORMANCE HIGHLIGHTS
- The acquisition of the $6.9 billion Saxon servicing portfolio was completed on May 3, 2010.
- The signing on May 28, 2010 of a definitive agreement to acquire the servicing rights and platform of HomEq from Barclays Bank which is projected to close on September 1, 2010.
- Standard and Poor's upgraded Ocwen's unsecured debt rating from "B-" to "B" while Moody's removed their negative outlook.
- The completion of 14,384 modifications which was within our guidance of 12,500 to 15,500.
Subsequent to the end of the quarter, the Company successfully closed a syndicated $350 million five year Senior Secured Term Loan Facility that will be used in part to acquire HomEq.
"With the acquisition of HomEq, we will become the third largest subprime servicer with over $80 billion in unpaid principal balances. Since 2001, Ocwen's servicing portfolio has grown at an average annual rate of 16%. We believe that there will be continued consolidation in the servicing industry and that we have significant and sustainable competitive advantages that make us the most viable acquirer of subprime servicing rights. Those advantages include our strong financial position, highly scalable platform, lowest operating cost structure and our ability to resolve delinquent loans faster and for higher value than other servicers. With the closing of the $350 million Senior Secured Term Loan Facility, Ocwen will have $200 million of liquidity after funding the HomEq acquisition," stated Chairman and CEO William Erbey.
"Our newly acquired servicing portfolio of $6.9 billion from Saxon had minimal impact on second quarter results as it was boarded in the middle of the quarter, and ancillary revenues, which are driven by the resolution of non-performing loans, will not ramp up until a few quarters after the acquisition. Similarly, as we resolve non performing loans over the next several quarters, we also expect to see a reduction in outstanding advances. Through our industry leading loan modification efforts and other loan workouts, we are able to shorten the timeframe that loans remain nonperforming.
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