Quarterly loan originations fell by nearly a third at Ocwen Financial Corp., while income was lower and the mortgage servicing portfolio was down.
In its third-quarter earnings report, Ocwen said it had approximately $1.5 billion in home loan production during the period.
Business declined from the second quarter, when roughly $2.2 billion in residential loans were originated.
Loans funded by Ocwen-subsidiary Homeward Residential accounted for $1.4 billion of third-quarter activity, while $0.142 billion was originated through partnerships.
Mortgage servicing rights on around $30 billion in Fannie Mae and Freddie Mac loans were transferred from OneWest during the third quarter. Most of the remaining $42 billion in non-agency MSRs pending sale are expected to be transferred from OneWest this month.
“We have been quite cautious in our servicing transfers making certain that we have sufficient resources to support the transition of these portfolios,” Ocwen Chairman Bill Erbey stated in the report. “In the case of OneWest, we were fully-staffed well in advance of boarding the loans. We feel very comfortable that once we have completed the ResCap transition to the Ocwen technology platform, we will return to our historical margins.”
The residential servicing portfolio closed out September at $434.819 billion.
The servicing portfolio was little changed from $436.255 billion as of June 30 but has grown substantially from $127.067 billion as of Sept. 30, 2012.
Servicing on non-performing loans and real-estate-owned accounted for 14.6 percent of the latest total..
Erbey noted that MSRs on around $400 billion in loans are in its current pipeline, and MSRs on at least $100 billion in loans are expected to be awarded by sellers before the end of the year.
The Atlanta-based company earned $76 million before income taxes. Earnings fell from $88 million in the second quarter and $81 million in the third-quarter 2012.
“Notwithstanding our record revenues, revenues were suppressed due to delays, that have now been resolved, in boarding the OneWest transaction,” Erbey explained. “As expected, margins were below historical levels due to the timing involved in transitioning ResCap and OneWest.”
