Ocwen Financial Owned Liberty Reverse Mortgage Has Record Losses In 2nd Quarter.
Executives at Liberty Reverse Mortgage owner Ocwen Financial are worried. Why?
Ocwen says the reverse mortgage unit recorded a pre-tax loss of $26 million in Q2 2022. This is in comparison to a profit of $6 million one year prior.
Liberty Reverse Mortgage has not been immune to the radically different market environment.
Ocwen CEO Glen Messina described that Liberty Reverse Mortgage continues to be a major factor in its portfolio diversification efforts.
Liberty Reverse Mortgage was formerly known as Reverse Mortgage Solutions. Ocwen purchased RMS from Mortgage Assets Management through their PHH Mortgage division. Ocwen then changed the name.
Mortgage Asset Management bought for the fire sale price of $762 million from Ditech during their bankruptcy in 2020.
Outlook For Liberty Reverse Mortgage And Ocwen
Messina acknowledged the loses are due higher interest rates. He also attributed them to the industry’s pivot to attracting new borrowers. However, Messina says the company believes that the industry is excited about their entry into reverse mortgage servicing.
He told Reverse Mortgage Daily:
Messina also discussed the reputation of the reverse mortgage industry. He believes Ocwen is moving in it a positive direction. The company sees reverse mortgages as a potential as a tool for retirement planning.
Messina said he wants to move the company into direct-to-consumer retail originations. The strategy is predicted to maintain the highest revenue margins.
Messina also added that the unfortunate downsizing was necessary
In addition, Messina also spoke specifically about a more challenging operating environment. Ocwen is preparing for substantial volume declines and potentially stagnant growth along with the rest of the industry.
Ocwen’s stock price also fell 19% on Friday to $28.29. This is down $6.92 from earlier in the week.
This article originally appeared on MFI-Miami.
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