Ocwen Financial Corp. said its fourth-quarter net loss narrowed 46% from a year earlier, to $3.7 million, or 6 cents a share, as it cut operating costs.

The West Palm Beach, Fla., servicer of subprime mortgages said Thursday that it incurred $14.7 million of after-tax paper losses on trading securities and investments.

Income from the core servicing business jumped 44%, to $18 million, as the unit's operating expenses fell 16%, to $40 million.

However, revenue from the business declined 6.7%, to $75.7 million. Faster prepayment speeds caused the servicing portfolio to contract 24%, to $40 billion.

William Erbey, Ocwen's chairman and chief executive, said it renewed $500 million of credit lines that finance servicing advances in December and January.

The company is "developing advance financing facilities with new private-sector providers," he said. Ocwen also has joined an industry coalition that is seeking to have the government-sponsored enterprises guarantee such advances and to have the Term Asset-Backed Securities Loan Facility finance them, Erbey said.

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