Ocwen Financial Corp. and Walter Investment Management Corp. both recorded full-year losses in 2015, though that is where comparisons between the two companies cease.
Ocwen's net loss for the 2015 fiscal year came to $247 million, an improvement from a loss of $472.6 million reported a year ago. The company also reported an improvement for the fourth quarter of 2015, reporting a net loss of $224.2 million versus a net loss of $521.9 million the prior year. Losses per share were $1.79 for the fourth quarter and $1.97 for the full fiscal year.
A 59% reduction in expenses year-over-year to $359.8 million in the fourth quarter drove the overall improvement in the company's financial results, reflecting the effects of cost-cutting measures Ocwen has undertaken. A 26.5% drop in revenue from 2014 during the quarter, to $362.5 million, stemmed largely from the impact of sales of agency mortgage servicing rights and portfolio run-off during 2015.
"We continue to make progress in resolving legacy issues," Ocwen President and Chief Executive Ron Faris said in a news release Monday. "We also continue to lower our corporate debt, ending the year with a corporate debt to equity ratio of under 0.9 to 1…We have made good progress on our cost improvement initiative announced last year, and we are committed to making further progress in this area, while continuing to focus on the borrower experience."
The company's performance improved across its three major segments during both the fourth quarter and the full fiscal year.
The company recorded a net loss of $62.6 million during the fourth quarter and a net profit of $15.9 million for the full year in its servicing segment versus losses of $386.8 million and $174.1 million for the fourth quarter and full fiscal year, respectively, in 2014. Similar improvements were seen in the lending and corporate segments.
In the fourth quarter of 2015, Ocwen also announced the creation of its automotive capital services commercial lending business, which has entered eight sales markets in five states. The company said that the new auto segment, which makes short-term inventory-secured loans to used car dealers, had made $19 million in new commitments during the fourth quarter.
"Ocwen believes this business can provide meaningful income diversification and growth as it increases its scale through a national rollout," the company said in the release.
Walter Investment meanwhile reported that its full-year loss had grown to $263.2 million in 2015 from a loss of $110.3 million the year before, representing nearly a 139% increase. Losses per share for the full fiscal year were $7.
Income for the full fiscal year dropped 14% to $1.27 billion, while expenses rose 5% to $1.71 billion.
In the fourth quarter, the servicing segment more than doubled its net loss from the previous year, with the loss growing to $148.6 million from $69 million the year before. Similarly, the reverse mortgage segment's net loss worsened 6%, to $41.4 million.
One segment that did show signs of improvement was the originations division, where net income jumped to $12.3 million in the fourth quarter of 2015 from just $2 million the year prior.
