Feb 27 Mortgage servicer Ocwen Financial Corp's
quarterly profit jumped 60 percent and revenue more than
doubled as banks sell more servicing rights to meet stricter
However, operating expenses more than tripled and the
largest U.S. non-bank mortgage servicer reported results that
fell slightly short of analysts' expectations.
Mortgage servicers are paid by owners of loans, typically
banks and investors, to collect payments and handle
delinquencies and foreclosures - major headaches for banks.
Net income attributable to Ocwen's common shareholders rose
to $104.3 million, or 74 cents per share, in the fourth quarter
ended Dec. 31, from $65.2 million, or 47 cents per share, a year
Revenue grew to $556 million from $236.6 million.
Analysts on average expected the earnings of 76 cents per
share on revenue of $559.7 million, according to Thomson Reuters
Operating expenses increased to $340.9 million from $99.1
While the mortgage servicing business has grown rapidly in
the wake of the financial crisis, it is not without controversy.
New York's Department of Financial Services said on
Wednesday that executives at Ocwen have ties with related
mortgage companies. This may give them an incentive to push
borrowers into foreclosure, the banking regulator said.
The department earlier this month halted Ocwen's purchase of
servicing rights on a portfolio of mortgages from Wells Fargo &
Co on concerns that the company does not have the
ability to handle the load.
Other state and federal authorities have expressed concerns
about the practices of non-bank mortgage servicers.
"We continue to focus our attention on regulatory compliance
and on assisting struggling homeowners," Ocwen Chief Executive
Ron Faris said in a statement on Thursday.
"During 2013 we made significant progress in enhancing our
compliance management system."
Ocwen shares, which have fallen about 34 percent since the
beginning of the year, closed at $36.76 on the New York Stock
Exchange on Wednesday.