Ocwen Financial Corporation's stock fell 28% last week after the company issued a quarterly earnings report. The stock had already fallen 75% over the past two years. Ocwen is the fifth-largest servicer for mortgages in the United States. A servicer is a company that is retained by the mortgage holder to oversee the functionality of the loan on a day-to-day basis. A servicer's job includes collections, mortgage reform (i.e., loan modifications and refinances), and borrower accounting. Often times the servicer will change throughout the loan.
There are several attributing factors according to a recent Bloomberg Business article reporting Ocwen's financial decline. One factor is the amount of increased complaints from regulators on how Ocwen handled soured loans. In addition, Ocwen is still in the process of selling off $25 billion of servicing rights to competing-servicer, Nationstar Mortgage Holdings Inc. Ocwen's plummeting stock correlates with their loss in net income, which is down 85% from a year earlier and loss in revenue which is down 16%.