This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kass: Nationstar vs. Ocwen

Fine Points on Nationstar's Accounting

Discount on advances purchased is recognized under "interest income" in the proportion of advance collected:

  • This component contributed $6.5 million to first-quarter 2013 earnings and $11.5 million to fourth-quarter 2012 earnings.
  • The accurate number for second quarter 2013 will be disclosed in the 10Q, and we estimate it to be in the range of $20 million to $25 million.

Mortgage-servicing rights on book are mark-to-market:

  • Nationstar increased its mortgage-servicing rights mark by $118 million.
  • 50% of the benefit is passed onto excess spread holder.
  • Unlike Ocwen, Nationstar does not have 100% ownership of mortgage-servicing rights.

Accrued servicing fees are recognized on balance sheet:

  • For first quarter 2013, it was $101 million -- the company does not provide any further details.

Mortgage-servicing liabilities are provided on the balance sheet:

  • The amount provisioned has been between $81 million and $83 million since second quarter 2012, though the servicing portfolio has more than doubled over the past year. This might be underprovided.
  • Delinquent agency portfolios recently acquired should have increased this amount by $125 million to $150 million.

Legacy book:

  • The company recognizes a $7 million to $8 million loss on its legacy book every quarter despite improvements in credit and interest rate markets over the past two years.
  • The legacy book might still be overvalued at $257 million.
At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Real Money
Try it NOW

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs