"We have also reached the stage where loans modified under the federal government's HAMP initiative are now reaching their one year life, entitling us to additional success fees. We recorded $0.7 million in HAMP success fees in the second quarter and expect this revenue stream to increase over the next few quarters," said Ronald Faris, President of Ocwen.Faris also added, "We are on track to close the HomEq transaction as scheduled on September 1, 2010. With the closing of HomEq and Saxon, we will have deployed over $440 million in effective equity into the servicing business this year doubling our investment. As our objective is to earn a 25% or better pre-tax return on the equity deployed in the servicing business, we have substantially increased the earnings capabilities of the servicing business. For the remainder of the year, however, we will see a sizeable negative impact on reported pre-tax earnings of approximately $50 million due to the set-up and transition costs associated with acquiring the HomEq platform. These costs were built into our investment analysis and anticipated cumulative returns, but they are required to be expensed as incurred and can not be capitalized."
Ocwen Financial Corporation Announces Second Quarter 2010 Financial Results
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