Ocwen Sees Revenue Pop from Nationwide Credit

Ocwen Financial Corp.’s (NYSE: OCN) June purchase of collector Nationwide Credit Inc. proved a revenue winner for its ARM division but integration costs sent the division to a loss, according to Ocwen’s recent third quarter earnings report .

Ocwen’s receivables management division or Recovery Group reported a $3 million pre-tax loss due to integration expenses, compared with a loss of $384,000 in the third quarter of 2006. However, Recovery Group revenues jumped to nearly $16.9 compared with $1.7 million a year ago.

Revenues across all of Ocwen’s business units were $125.5 million in the third quarter, up nearly 14 percent compared with $110.1 million in the same period a year ago. Third quarter net income was nearly $6 million, down from $17 million in the third quarter of 2006.

Chairman and CEO William C. Erbey attributed the decline to the impact of the credit crunch as the firm took a write down of $14.6 million in non-core assets.

West Palm Beach, Fla.-based Ocwen also operates a loan servicing group and mortgage fulfillment unit. The loan servicing group saw a rise in delinquencies and a slow down in prepayments during the quarter.

Ocwen paid $55 million in cash for the privately held Nationwide which reported 1,200 staff at six centers in the U.S. and Canada ("Collection Agency to be Acquired by Ocwen for $55 million," 6/7). Ocwen announced it had retained Nationwide’s top management.