Ocwen Financial Corp. in West Palm Beach, Fla., posted yet another net loss during the second quarter, this time reflecting the impact of legal and settlement costs among other factors.
The company reported a net loss of $87.4 million, as compared with net income of $9.7 million during the second quarter of 2015. Losses per share were 71 cents, the company said Thursday.
Expenses were up at the servicer by 9.3% from last year, coming in at $385 million. Among the expenses weighing on Ocwen this quarter were $40 million in litigation-related fees tied to Ocwen's settlement of two whistleblower lawsuits and a $22 million increase in monitor expenses. Ocwen also recorded $33 million in unfavorable charges to the fair value of its mortgage servicing rights due to lower interest rates.
But controlling for these factors, as well as $15 million in strategic advisor costs, the company said that expenses were 18% lower than last year, mainly due to a reduction in the size of the servicing portfolio.
Total revenue dropped 19% to $373.1 million, reflecting declines in both servicing and lending revenue.
Despite the quarterly loss, Ocwen Chief Executive and President Ron Faris pointed to the company's progress, particularly in new initiatives tied to mortgage lending and automotive capital services.
"Our growth in mortgage lending and automotive capital services are gratifying early indicators of potential success in new initiatives that can allow us, over time, to drive earnings growth," Faris said in a news release.
"While we still have more to do on various fronts, we are moving towards returning to profitability in our core operations while growing our asset-generation activities."
