Ocwen Financial Corporation Announces Third Quarter 2010 Financial Results
THIRD QUARTER BUSINESS PERFORMANCE HIGHLIGHTS
- Completed the acquisition of the $22.4 billion HomEq servicing portfolio and platform on September 1, 2010.
- Hired and trained 777 people for HomEq prior to closing and successfully transferred 134,000 loans to the Ocwen platform upon closing.
- Increased revenue on the Saxon servicing portfolio from an average annualized rate of 39 basis points per dollar of average Unpaid Principal Balance to 79 basis points.
- Reduced the advance ratio to Unpaid Principal Balance on the Saxon portfolio from 8.0% at boarding to 6.7%
- Completed 15,928 modifications, of which 4,241 were HAMP modifications, which was at the upper end of our guidance of 14,000 to 16,000.
Chairman William Erbey stated, "The closing of the acquisition of HomEq and boarding of this portfolio on Ocwen's platform has gone exceptionally well. September revenue for the HomEq portfolio met our internal expectations. Furthermore, revenue from our Saxon servicing portfolio increased almost three fold in our first full quarter, fully recovering from a slow start. Both of these acquisitions demonstrate the scalability of Ocwen's platform and enable us to significantly lower our cost per loan serviced."
Ronald Faris, President and CEO of Ocwen, stated, "The performance of our loan portfolio continues to improve, resulting in declining advances and increased liquidity. The delinquency rate on the Saxon portfolio has started to decline, contributing to a decrease in Ocwen's advances on the Saxon portfolio by $47.0 million during the third quarter. We expect advances to decline further as we bring the performance of the Saxon and HomEq portfolios more in line with similar loans in Ocwen's legacy portfolio. Our results to date with newly acquired portfolios support our belief that Ocwen can improve the performance of any seasoned non-prime portfolio that may become available for purchase."
Faris added, "After completing the HomEq and Saxon acquisitions, Ocwen ended the third quarter with $312.6 million in cash and fully collateralized available credit. 79% of our advance borrowings are financed on term notes with the largest having a revolving period extending through August of 2013. On this basis, Ocwen's liquidity and positioning for growth are stronger than ever."
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