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Ocwen Financial Announces Operating Results FOR THIRD QUARTER 2015

The following excerpt is from the company's SEC filing.

Generated Q3 2015 Cash Flows From Operating Activities of $239 million

Ended September with $731 million of available liquidity, including $459 million of cash on hand

Reduced corporate debt by 47% or $812 million year to date

West Palm Beach, FL – (October 28, 2015) Ocwen Financial Corporation, (NYSE:OCN) (“Ocwen” or the “Company”)

, a leading financial services holding company, today reported a net loss of $(66.8) million, o r $(0.53) per share, for the three months ended September 30, 2015 compared to a net loss of $(75.3) million, or $(0.58) per share, for the three months ended September 30, 2014. Ocwen generated revenue of $405 million, down 21% compared to the third quarter of the prior year. Cash Flows from Operating Activities were $239 million for the three months ended September 30, 2015, compared to $349 million during the same period last year.

“In the third quarter, we continued to make progress on our strategic and operating initiatives. Our asset sale strategy has succeeded in generating proceeds and gains for the Company, enabling us to reduce leverage and focus on simplifying our operations. Our operating cash flow remained strong, enabling us to end the quarter with more than $731 million in available liquidity, including $459 million of cash on hand. The capital markets also continue to demonstrate strong support for the Company, as we were able to successfully refinance our $1.8 billion OMART servicing advance facility and execute an amendment with our term loan lenders to give us more flexibility moving forward” commented Ron Faris, President and CEO of Ocwen.

Mr. Faris continued, “We are making solid progress in developing our lending capabilities including expansion of our product offerings. Additionally, we are progressing as expected on the cost improvement initiatives that we laid out in the third quarter and anticipate identifying additional opportunities to reduce our operating costs. We remain committed to investing in our risk, compliance and technology infrastructure, and delivering best-in-class service to our customers.”

Third Quarter Results

Pre-tax loss for the third quarter of 2015 was $(55.9) million. Pre-tax results were impacted by a number of significant items including but not limited to: $41.2 million of net gains from sales of performing and non-performing agency mortgage servicing rights (MSRs) relating to loans with a total unpaid principal balance (UPB) of $22.0 billion, $(23.4) million of interest rate driven impairment of our GNMA MSRs carried at lower of cost or fair value, $(17.4) million in restructuring costs, including severance and Fiserv platform exit costs, $(12.5) million of monitor costs, $(11.1) million in legacy servicing claim reserves, $(11.0) million in legal and other settlement costs and $(8.2) million of expense incurred pursuant to our agreement with New Residential Investment Corp. in connection with downgrades to our S&P servicer ratings. Servicing recorded a $(12.7) million pre-tax loss inclusive of the gain on sales of MSRs, MSR fair value changes and legacy servicing claim reserves. The Lending segment generated $8.6 million of pre-tax income for the third quarter of 2015.

Additional Business Highlights

Launched “Ocwen Cares” web site aimed at helping borrowers in distress.

Continued joint initiative with NAACP, “Help and Hope for Homeowners,” aimed at encouraging struggling homeowners to seek assistance.

Completed 19,470 loan modifications with HAMP modifications accounting for 50% of the total. Modifications that included some principal reduction accounted for 45% of total modifications.

The constant pre-payment rate (“CPR”) decreased from 15.7% in the second quarter of 2015 to 14.7% in the third quarter of 2015. In the third quarter of 2015, prime CPR was 17.6%, and non-prime CPR was 11.8%.

Delinquencies increased slightly from 13.0% at June 30, 2015 to 13.1% at September 30, 2015, primarily driven by sales and transfers of performing agency loans.

Originated forward and reverse mortgage loans with UPB of $1.1 billion and $198.5 million, respectively.

Webcast and Conference Call

Ocwen will host a webcast and conference call on Wednesday, October 28, 2015, at 5 p.m., Eastern Time, to discuss its financial results for the third quarter of 2015. The conference call will be webcast live over the internet from the Company’s website at www.Ocwen.com, click on the “Shareholder Relations” section. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

About Ocwen Financial Corporation

Ocwen Financial Corporation is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of mortgage loans. Ocwen is headquartered in West Palm Beach, Florida, with offices throughout the United States and support operations in India and the Philippines. Utilizing proprietary technology, global infrastructure and superior training and processes, Ocwen provides solutions that help homeowners and make our clients’ loans worth more. Ocwen may post information that is important to investors on its website (www.Ocwen.com

Note Regarding Available Liquidity

Due to high liquidity levels, Ocwen is currently foregoing borrowings on a number of warehouse and servicing...


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