Slower prepayment speeds boosted
Fourth-quarter 2013 earnings per share rose to 56 cents from 49 cents the previous quarter as its net income rose to $40.1 million from $34.9 million during the same period. In fourth quarter of 2012, HLSS' net income was $14.3 million and it earned 44 cents per ordinary share.
Prepayment speeds at the company during 4Q 2013 fell to 12.4% from 13.7% on a consecutive-quarter basis, according to Sterne Agee analysts, who have raised their fiscal year 2015 estimate to $2.20 from $2.10.
HLSS anticipates first-quarter earnings per share will be around 50 to 54 cents based on its current prepayment rate assumptions.
The company during the fourth quarter of 2013 acquired $9.9 billion in servicing from Ocwen, ending the quarter with a total of $180.4 billion. Ocwen spun HLSS off in 2010 to acquire servicing assets.
HLSS in the fourth quarter of 2013 also closed on a purchase of roughly $600 million worth of Federal Housing Administration-insured Ginnie Mae Early Buy loans, which have cash flow dynamics in line with those of mortgage servicing rights.
