Ocwen Financial Corp., a servicer of subprime mortgages, said Tuesday that it plans to raise $250 million through an offering of common shares, and may use part of the proceeds for acquisitions.
The West Palm Beach, Fla., company also said it made $17.8 million, or 26 cents a share, in the second quarter, compared with a loss of $2.7 million, or 4 cents a share, a year earlier.
Ocwen said the implementation of the government's Home Affordable Modification Program during the period hurt its revenue. "All in-process loan modifications were reviewed, essentially restarting the modification process using different underwriting and documentation requirements," the company said.
As a result, its loan modifications declined 61%, reducing its servicing fees by about $8 million.
William Erbey, the company's chairman and chief executive, said in a press release that the company is focused on expanding its servicing portfolio, which contracted 14%, to $38 billion, in the quarter.
"Several servicing portfolios are for sale, and we are in the process of evaluating these opportunities," he said. Ocwen is also looking for more "special servicing opportunities that require little capital," like its contract to work out seriously delinquent low-documentation loans for Freddie Mac, Erbey said.