By Everdeen Mason
Ocwen Financial Corp. said its fourth-quarter earnings jumped
60%, after the New York Department of Finance said it is examining
the mortgage-servicing company over concerns that it is growing too
quickly.
The department of finance said the company's close relationships
with other firms may harm borrowers, after it and other authorities
alleged Ocwen and other nonbank mortgage-service firms have grown
too quickly, resulting in many of the same problems for borrowers
seen following the financial crisis, The Wall Street Journal
reported this week.
"We are working cooperatively with the New York Department of
Financial Services to address its concerns that led to an
indefinite hold on our transaction with Wells Fargo," said Chairman
Bill Erbey on Thursday. He said the company has grown as
prepayments trend lower, on its ability to help homeowners with
foreclosure, and as an improved economy drives down loan
delinquencies.
For the fourth quarter, Ocwen reported earnings of $105.3
million, or 74 cents a share, up from $65.3 million, or 47 cents a
share, a year earlier.
Revenue more than doubled to $556 million as its largest
segment, servicing and subservicing fees, posted soaring revenue
growth to $490.2 million.
Analysts polled by Thomson Reuters expected per-share earnings
of 76 cents and revenue of $560 million.
Meanwhile, the company's total operating expenses more than
tripled to $340.9 million.
The New York Department of Financial Services has been
scrutinizing Ocwen's business amid concerns by the regulator that
the company isn't equipped to handle the growth of its servicing
portfolio. Earlier this month, Superintendent Benjamin Lawsky
halted a deal in which Ocwen agreed to buy the rights to service
$39 billion of mortgages from Wells Fargo & Co., citing
concerns about the company's rapid growth.
Andrew R. Johnson contributed to this article.
Write to Everdeen Mason at everdeen.mason@wsj.com
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