Altisource reports rare origination-linked gain but remains in the red

Altisource Portfolio Solutions took another loss in the first quarter as it continued to struggle with the lingering impact of the pandemic-related restrictions on default services, but it did eke out some additional income from its Lenders One subsidiary that supplemented core servicing-related earnings.

The company's loss for the period was $12.9 million, generally in line with those seen in the fourth quarter of last year and during the first three months  of 2022.

Revenue from its servicer and real estate segment was $29.8 million, which was up slightly from $26.5 million the previous quarter and $27.2 million a year earlier. 

The company also recorded its first quarter of production-related sequential revenue growth in two years with $7.3 million worth of income from the segment added during the period, compared to $6.3 million. Previously, it had not had a sequential gain in eight quarters.

Revenue from the origination segment wasn't as strong as it was a year earlier when the business line brought in $10.6 million.

Most of the past quarter's origination-related earnings came from Lenders One, which is a mortgage industry cooperative that an Altisource subsidiary currently manages. Lenders One contributed $5.6 million to the segment's revenue in the first quarter.

"This reflects significantly better than market performance from the Lenders One business as we gain traction with our solutions, which are designed to help our lenders save money," CEO Bill Shepro said.

Lenders have been eager for savings as they've been struggling with high costs.

Altisource is still watching for potential opportunities for its default services segment given that prognosticators are continuing to forecast a U.S. recession, but Shepro said the company isn't counting on it. 

"We are not waiting for the default market to recover to drive growth," said Shepro.