Ocwen Financial Corp., the distressed-asset specialist, is the latest company to take a charge because of rising competition and low interest rates, then look for a partner.

Ocwen, based in West Palm Beach, Fla., took a $77.6 million charge related to its investment in agency mortgage securities and sold its entire investment.

The company reported a $37.9 million net loss for the quarter ended June 30, compared to net income of $18.8 million a year earlier.

Ocwen has "historically invested in a portfolio of AAA-rated agency" securities, said William Erbey, chief executive. "Due to unprecedented levels of mortgage prepayments and a continued inversion in the shape of the yield curve, what we until recently believed to be a sound investment strategy has become one of increasing volatility and sensitivity to interest rate movements. Therefore, we have decided to put this behind us and discontinue this investment strategy."

The company also said in a written statement that it had hired an investment bank to "identify strategic partners who can enable us to expand our franchise both domestically and internationally."

Neither Mr. Erbey nor Christina Reich, president, would comment further on prospective partners.

The company's capital ratios remain strong despite the writedown, Ms. Reich said.

The provision for loan losses was increased by $1.8 million in the second quarter. Expenses almost doubled, surging by 90% as the company added employees and equipment.

In the quarter, Ocwen completed its acquisition of Cityscape Financial Corp.'s business in the United Kingdom for $421.3 million. Ocwen also assumed $34.3 million of Cityscape's liabilities there.

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