Ocwen Financial (OCN) in Atlanta reported record revenue in the third quarter as it continued to expand its mortgage-servicing portfolio.
The mortgage servicer, which specializes in distressed and subprime loans, said Thursday that its third-quarter revenue rose 90% from the same period last year, to $232.7 million, while servicing and subservicing fees nearly doubled, to $223 million.
The results reflected Ocwen's purchases during the quarter of mortgage servicing rights to loans with an unpaid principal balance of $6.1 billion.
Ocwen earned $51.4 million in the quarter, up 154% from a year earlier.
Expense from operations rose 41%, to $92.7 million, as costs for amortization of mortgage servicing rights, servicing and origination, and occupancy and equipment all rose.
Over the past three years, Ocwen has been actively buying mortgage servicing rights portfolios and mortgage-related companies.
Last month, the company said struck two deals, announcing it would buy Homeward Residential Holdings from WL Ross & Co. for $750 million in cash and stock and acquire buy Genworth Financial, a reverse mortgage lender, for $22 million in cash.
Also in October, Ocwen and its partner Walter Investment Management Corp. bid successfully for the origination and servicing assets of Residential Capital Corp.. a unit of Ally Financial that filed for bankruptcy in May.
"With the closing of the ResCap and Homeward acquisitions, Ocwen will become the fifth-largest mortgage servicer in the country," Ron Faris, Ocwen's chief executive, said in a news release. "More importantly, the infrastructure, management and staff from these acquisitions expand and enhance our capabilities in important areas such as Ginnie Mae and master servicing."
Ocwen’s shares fell 7.7% Thursday, to close at $35.60.