Ocwen Financial Corporation
Aug 4, 2009

Ocwen Financial Corporation Announces Second Quarter Financial Results

WEST PALM BEACH, Fla., Aug. 4, 2009 -- Ocwen Financial Corporation ("Ocwen" or the "Company") (NYSE:OCN) today reported net income of $17.8 million or $0.26 per share for the three months ended June 2009. This compares to a net loss of $2.7 million or $0.04 per share for the second quarter of 2008. Net income significantly increased despite (i) an expected drop in loan modifications as the federal government's Home Affordable Modification Plan ("HAMP") was implemented during the quarter contributing an $8.1 million decline in servicing and subservicing fees and (ii) $2.3 million of professional services expenses principally incurred in connection with the Altisource separation. Income from continuing operations before income taxes was $26.3 million for the three months ended June 2009 as compared to $3.1 million for the second quarter of 2008.

Net income for the six months ended June 2009 was $32.9 million or $0.49 per share, compared to $2.6 million or $0.04 per share for the same period in 2008. Net income was higher despite $3.7 million of professional services expenses principally associated with the Altisource separation. Income from continuing operations before income taxes was $49.6 million for the six months ended June 2009 as compared to $11.5 million for the six months ended June 2008.

BUSINESS PERFORMANCE HIGHLIGHTS

   * The implementation of HAMP had a short-term impact on revenues
     and earnings as all in-process loan modifications were reviewed,
     essentially restarting the modification process using different
     underwriting and documentation requirements. As expected, this
     lead to a 61% decline in completed modifications from the second
     quarter of 2008. The HAMP modification program is gaining
     momentum as offers were extended to 404 borrowers in April 2009,
     836 in May 2009 and 2,172 in June 2009.

   * The decline in completed loan modifications contributed $8.1
     million to the total decline in Servicing income from operations
     for the three months ended June 2009 as compared to 2008.

   * Cost reduction efforts led to a 10.6% decline in operating costs
     for the three months ended June 2009 as compared to June 2008

   * Ocwen continues to reduce non-core assets with the completed sale
     of the GSS Germany operations in June 2009 and an agreement to
     sell BOK, our German bank subsidiary, subject to regulatory
     approvals.

   * Liquid balance sheet with $213.9 million of cash as of June 30,
     2009 and excess advance financing capacity of 80.1%.

   * Income from continuing operations before income taxes of $49.6
     million for the six months ended June 2009 improved dramatically
     primarily due to lower unrealized mark-to-market and impairment
     losses.

Chairman and CEO William Erbey stated, "We have been exceptionally busy this quarter as we re-focus our efforts on growing our servicing business. With our solid liquidity position and excess financing capacity, we are well-positioned to grow through acquisitions of servicing portfolios. We believe the subprime servicing industry is poised for a period of consolidation.

"We are making solid progress on our four strategic initiatives:

   1. Liquidity and balance sheet strength;
   2. Revenue opportunities;
   3. Quality and cost structure leadership; and
   4. Completion of the Ocwen Solutions separation.

"First, we further reduced debt during the quarter by $56.7 million and increased cash by $55.1 million from March 31, 2009. As of June 30, 2009 we have $213.9 million in cash and over $650 million in excess advance financing capacity. We expect to participate in the Term Asset-Backed Securities Loan Facility program ("TALF") beginning in September and anticipate replacing a $165 million amortizing note with a longer-term TALF note.

"Second, we are very focused on growing our servicing unpaid principal balance ("UPB"). Several servicing portfolios are for sale, and we are in the process of evaluating these opportunities. We continue to aggressively pursue special servicing opportunities that require little capital, and our pilot program with Freddie Mac is an example of the kind of business that we are targeting. We also believe the current distressed mortgage market may provide an opportunity to sponsor an asset management vehicle that leverages our servicing capabilities. We would expect to participate in the earnings of such a vehicle via management fees, carried interest and subservicing fees.

"Third, our cost reduction efforts led to a 10.6% decline in operating costs for the three months ended June 2009 as compared to June 2008. Also, just yesterday enhancements to our loan resolution model were released into production eliminating significant manual work necessitated by the HAMP. We also have additional significant HAMP related enhancements to our scripting, workflow, telephony and underwriting systems that are planned to become operational over the next eight weeks. Ultimately, HAMP will become a far more streamlined process than the process we have employed to date. We expect these initiatives to reduce variability in the performance of our staff and increase the number of completed HAMP loan modifications. In fact, each month the number of HAMP modification offers extended to borrowers has dramatically increased.

"Fourth, on July 31, 2009, Altisource Portfolio Solutions S.A., the newly formed publicly-traded company comprising the majority of our business operations currently included within the Ocwen Solutions business line, began 'when issued' trading on the NASDAQ Global Select Market under the ticker symbol ASPSV. We expect to complete the separation of Altisource on August 10, 2009 in a tax free pro rata distribution to shareholders of record as of August 4, 2009."

Ocwen Asset Management

Ocwen Asset Management generated income from operations of $28.5 million in the second quarter of 2009, 42.3% lower than the second quarter of 2008. Income from continuing operations before taxes for the second quarter of 2009 declined 55.2% to $11.2 million from $25.1 million in the second quarter of 2008 reflecting the expected decline in loan modifications and lower servicing UPB, partially offset by lower operating expenses.

Income from continuing operations before taxes for Servicing of $15.5 million declined 51.3%, a $16.4 million decrease from the second quarter of 2008, $8.1 million of which was attributable to the decline in loan modifications due to the implementation of the HAMP. Servicing realized operating expense savings of 22.9%, or $9.8 million, from reduced staffing levels, lower amortization and lower compensating interest expense compared to the second quarter of 2008.

Losses from continuing operations before taxes for Loans and Residuals decreased to $2.8 million as compared to $5.4 million in the second quarter of 2008. This improvement was primarily due to lower unrealized losses associated with declines in the estimated market value of loans, real estate and residual securities.

Asset Management Vehicles incurred a $1.4 million loss from continuing operations before taxes as compared to a $1.3 million loss from continuing operations in the second quarter of 2008.

Ocwen Solutions

Income from operations at Ocwen Solutions increased 196.6% to $12 million compared to the second quarter of 2008 primarily due to revenue growth at Mortgage Services and cost reductions at Financial Services and Technology Products. Income from continuing operations before taxes improved to $12.1 million in the second quarter of 2009 from a loss of $9.4 million in the second quarter of 2008, which included $13.6 million in unrealized losses at BMS Holdings, Inc., an unconsolidated subsidiary.

Mortgage Services benefited from geographic expansion, increased penetration of existing clients and the introduction of new default-oriented products as second quarter revenues increased 67% to $24.2 million compared to $14.5 million in the second quarter of 2008. Income from continuing operations before taxes increased significantly to $8.8 million in the second quarter of 2009.

Revenues at Financial Services for the second quarter of 2009 declined 13% to $16.5 million, compared to $19.0 million in 2008. This was primarily due to lower collection rates due to the current economic climate. A 17% decline in total operating expenses, compared to the second quarter of 2008, more than offset the decline in revenues resulting in a $1.7 million loss from continuing operations before taxes.

Technology Products increased income from operations 91% to $5 million compared to the second quarter of 2008. This growth came from a 27.3% reduction in total operating expenses compared to the second quarter of 2008.

Corporate

Unrealized gains on auction rate securities were $6.0 million in the second quarter of 2009. This compares to unrealized losses of $6.8 million in the second quarter of 2008. Total consolidated assets declined 9% from December 31, 2008 to $2,034.3 million at June 30, 2009 primarily due to a $217.3 million decrease in match funded advances. Total consolidated liabilities decreased 17.7% from December 31, 2008 to $1,339.7 million at June 30, 2009 primarily due to lower match funded liabilities and servicer liabilities.

Prior periods were adjusted to give effect to the required retrospective adoption of new accounting guidance which caused us to recognize additional non-cash interest expense related to the convertible notes outstanding.

Ocwen Financial Corporation is a leading business process solutions provider specializing in loan servicing, special servicing and mortgage services. Ocwen is headquartered in West Palm Beach, Florida with offices in Arizona, California, the District of Columbia, Florida, Georgia and New York and global operations in Canada, India and Uruguay. Utilizing our state of the art technology, world-class training and six sigma processes, we provide solutions that make our clients' loans worth more. Additional information is available at www.ocwen.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the securitization market and our plans to securitize loans and expectations as to the impact of rising interest rates and cost-effective resources in India. Forward-looking statements are not guarantees of future performance, and involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially.

Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the following: general economic and market conditions, prevailing interest or currency exchange rates, governmental regulations and policies, international political and economic uncertainty, availability of adequate and timely sources of liquidity, federal income tax rates, real estate market conditions and trends and the outcome of ongoing litigation as well as other risks detailed in OCN's reports and filings with the Securities and Exchange Commission, including its periodic report on Form 10-K for the year ended December 31, 2008 and Form 10-Q for the quarters ended March 31, 2008, June 30, 2008, September 30, 2008 and March 31, 2009 and our Forms 8-K filed during 2008 and 2009. The forward-looking statements speak only as of the date they are made and should not be relied upon. OCN undertakes no obligation to update or revise the forward-looking statements.

 Residential Servicing Statistics
 --------------------------------
 (Dollars in thousands)
 ----------------------

                        At or for the three months ended
           -----------------------------------------------------------
             June 30,    March 31,   Dec. 31,    Sept. 30,   June 30,
               2009        2009        2008        2008        2008
           ----------- ----------- ----------- ----------- -----------
 Total
  unpaid
  principal
  balance
  of loans
  and REO
  serviced
  (1)      $38,406,007 $40,789,135 $40,171,532 $41,754,368 $44,831,875
 Non-
  performing
  loans and
  REO
  serviced
  as a % of
  total
  UPB(1)(2)      27.4%       25.1%       24.3%       22.7%       22.4%
 Prepayment
  speed
  (average
  CPR)             22%         21%         25%         26%         26%

 (1) Excluding REO serviced pursuant to our contract with the U.S.
     Department of Veterans  Affairs,  which we elected not to
     renew in July 2008. Transition of the remaining properties to
     the new service provider was completed in October.

 (2) Loans for which borrowers are making scheduled
     payments under forbearance or bankruptcy plans are considered
     performing loans. Non-performing loans exclude those serviced
     under special servicing agreements where we have no
     obligation to advance.


 Segment Results (In thousands)

                                Three months           Six months
 For the periods            --------------------  --------------------
  ended June 30,               2009       2008       2009       2008
                            ---------  ---------  ---------  ---------
                                     (As adjusted)        (As adjusted)
 Ocwen Asset Management
   
    Servicing
     Revenue                $  62,726  $  92,414  $ 137,421  $ 178,926
     Operating expenses        32,955     42,723     67,173     84,674
                            ---------  ---------  ---------  ---------
       Income from
        operations             29,771     49,691     70,248     94,252
     Other expense, net       (14,268)   (17,829)   (29,548)   (40,961)
                            ---------  ---------  ---------  ---------
       Income from
        continuing
        operations
        before taxes           15,503     31,862     40,700     53,291
                            ---------  ---------  ---------  ---------
   Loans and Residuals
     Revenue                       --         --         --         --
     Operating expenses           747        551      1,309      1,469
                            ---------  ---------  ---------  ---------
       Loss from
        operations               (747)      (551)    (1,309)    (1,469)
     Other expense, net        (2,096)    (4,890)    (5,672)    (7,631)
                            ---------  ---------  ---------  ---------
       Loss from
        continuing
        operations
        before taxes           (2,843)    (5,441)    (6,981)    (9,100)
                            ---------  ---------  ---------  ---------
   Asset Management
     Revenue                      460      1,127        997      2,178
     Operating expenses         1,016        926      1,778      1,616
                            ---------  ---------  ---------  ---------
       Income (loss)
        from operations          (556)       201       (781)       562
     Other expense, net          (846)    (1,479)    (1,148)    (3,286)
                            ---------  ---------  ---------  ---------
       Loss from
        continuing
        operations
        before taxes           (1,402)    (1,278)    (1,929)    (2,724)
                            ---------  ---------  ---------  ---------
 Income from continuing
  operations before
  income taxes                 11,258     25,143     31,790     41,467
                            ---------  ---------  ---------  ---------

 Ocwen Solutions
   Mortgage Services
     Revenue                   24,165     14,495     42,182     31,249
     Operating expenses        16,017     10,945     28,909     24,463
                            ---------  ---------  ---------  ---------
       Income from
        operations              8,148      3,550     13,273      6,786
     Other income, net            700        678        722        596
                            ---------  ---------  ---------  ---------
       Income from
        continuing
        operations
        before taxes            8,848      4,228     13,995      7,382
                            ---------  ---------  ---------  ---------
   Financial Services
     Revenue                   16,471     19,030     33,787     38,529
     Operating expenses        17,557     21,128     35,706     40,139
                            ---------  ---------  ---------  ---------
       Loss from
        operations             (1,086)    (2,098)    (1,919)    (1,610)
     Other expense, net          (647)      (494)    (1,115)      (962)
                            ---------  ---------  ---------  ---------
       Loss from
        continuing
        operations
        before taxes           (1,733)    (2,592)    (3,034)    (2,572)
                            ---------  ---------  ---------  ---------
   Technology Products
     Revenue                   12,108     12,410     22,682     22,895
     Operating expenses         7,121      9,799     15,294     18,681
                            ---------  ---------  ---------  ---------
       Income from
        operations              4,987      2,611      7,388      4,214
     Other expense, net           (52)   (13,643)      (129)    (5,634)
                            ---------  ---------  ---------  ---------
       Income (loss)
        from continuing
        operations
        before taxes            4,935    (11,032)     7,259     (1,420)
                            ---------  ---------  ---------  ---------
 Income (loss) from
  continuing operations
  before income taxes          12,050     (9,396)    18,220      3,390
                            ---------  ---------  ---------  ---------

 Corporate Items and
  Other
   Revenue                        112        134        365        142
   Operating expenses           3,830      3,344      7,813     11,979
                            ---------  ---------  ---------  ---------
     Loss from
      operations               (3,718)    (3,210)    (7,448)   (11,837)
   Other income
    (expense), net              6,755     (9,425)     7,047    (21,491)
                            ---------  ---------  ---------  ---------
       Income (loss)
        from continuing
        operations
        before taxes            3,037    (12,635)      (401)   (33,328)
                            ---------  ---------  ---------  ---------

 Corporate Eliminations
   Revenue                     (6,863)    (8,385)   (13,665)   (14,443)
   Operating expenses          (6,593)    (8,150)   (13,066)   (13,680)
                            ---------  ---------  ---------  ---------
     Loss from
      operations                 (270)      (235)      (599)      (763)
   Other income, net              270        235        599        763
                            ---------  ---------  ---------  ---------
     Income from
      continuing
      operations
      before taxes                 --         --         --         --
                            ---------  ---------  ---------  ---------
 Consolidated income
  from continuing
  operations
  before income taxes       $  26,345  $   3,112  $  49,609  $  11,529
                            =========  =========  =========  =========


               OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except share data)

                            Three months             Six months
 For the periods       ----------------------  ----------------------
  ended June 30,          2009        2008        2009        2008
 ---------------       ----------  ----------  ----------  ----------
                                  (As Adjusted)           (As Adjusted)
 Revenue
   Servicing and
    subservicing fees  $   65,488  $  100,688  $  144,298  $  198,902
   Process management
    fees                   40,086      27,391      73,778      54,341
   Other revenues           3,605       3,146       5,693       6,233
                       ----------  ----------  ----------  ----------
     Total revenue        109,179     131,225     223,769     259,476
                       ----------  ----------  ----------  ----------

 Operating expenses
   Compensation and
    benefits               27,254      32,754      55,799      62,840
   Amortization of
    servicing rights        8,543      14,592      18,584      28,606
   Servicing and
    origination            15,835      11,638      28,473      26,049
   Technology and
    communications          4,481       6,421       9,289      11,691
   Professional
    services                8,208       6,336      15,394      21,085
   Occupancy and
    equipment               4,818       5,807      10,864      12,340
   Other operating
    expenses                3,511       3,718       6,513       6,730
                       ----------  ----------  ----------  ----------
     Total operating
      expenses             72,650      81,266     144,916     169,341
                       ----------  ----------  ----------  ----------

 Income from operations    36,529      49,959      78,853      90,135
                       ----------  ----------  ----------  ----------

 Other income (expense)
   Interest income          2,254       3,231       4,419       8,044
   Interest expense       (17,300)    (21,109)    (33,963)    (47,179)
   Gain (loss) on
    trading securities      5,435      (9,722)      5,055     (21,745)
   Gain (loss) on
    debt repurchases           --         (86)        534         (86)
   Loss on loans held
    for resale, net        (2,987)     (5,929)     (7,541)    (10,438)
   Equity in earnings
    of unconsolidated
    entities                 (576)    (14,655)       (549)     (7,700)
   Other, net               2,990       1,423       2,801         498
                       ----------  ----------  ----------  ----------
     Other expense, net   (10,184)    (46,847)    (29,244)    (78,606)
                       ----------  ----------  ----------  ----------

 Income from continuing
  operations before
  income taxes             26,345       3,112      49,609      11,529
 Income tax expense         9,472         424      17,509       3,363
                       ----------  ----------  ----------  ----------
  Income from
   continuing
   operations              16,873       2,688      32,100       8,166
 Income (loss) from
  discontinued
  operations, net of
  income taxes              1,052      (5,182)        864      (5,386)
                       ----------  ----------  ----------  ----------
   Net income              17,925      (2,494)     32,964       2,780
     Net loss (income)
      attributable to
      minority interest
      in subsidiaries         (95)       (223)        (25)       (225)
                       ----------  ----------  ----------  ----------

     Net income
      attributable to
      Ocwen Financial
      Corporation      $   17,830  $   (2,717) $   32,939  $    2,555
                       ==========  ==========  ==========  ==========

 Basic earnings per
  share
   Income from
    continuing
    operations
    attributable to
    OCN common
    shareholders       $     0.25  $     0.04  $     0.49  $     0.13
   Loss from
    discontinued
    operations
    attributable
    to OCN common
    shareholders             0.01       (0.08)       0.02       (0.09)
                       ----------  ----------  ----------  ----------

   Net income
    attributable to
    OCN common
    shareholders       $     0.26  $    (0.04) $     0.51    $   0.04
                       ==========  ==========  ==========  ==========

 Diluted earnings
  per share
   Income from
    continuing
    operations
    attributable
    to OCN common
    shareholders       $     0.24  $     0.04  $     0.48    $   0.13
   Loss from
    discontinued
    operations
    attributable
    to OCN common
    shareholders             0.02       (0.08)       0.01       (0.09)
                       ----------  ----------  ----------  ----------

   Net income
    attributable
    to OCN common
    shareholders       $     0.26  $    (0.04) $     0.49  $     0.04
                       ==========  ==========  ==========  ==========

 Weighted average
  common shares
  outstanding
   Basic               67,316,446  62,682,783  65,045,842  62,625,378
   Diluted             72,854,415  62,892,868  70,375,555  62,853,659


              OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                (Dollars in thousands, except share data)

                                               June 30,   December 31,
                                                 2009        2008
                                              ----------  ----------
                                                         (As Adjusted)
 Assets
   Cash                                       $  213,911  $  201,025
     Trading securities, at fair value
       Investment grade auction rate             243,285     239,301
       Subordinates and residuals                  3,440       4,369
   Loans held for resale, at lower
    of cost or fair value                         39,726      49,918
   Advances                                      153,732     102,085
   Match funded advances                         883,209   1,100,555
   Mortgage servicing rights                     132,729     139,500
   Receivables                                    47,923      42,798
   Deferred tax assets, net                      161,180     175,145
   Intangibles, including goodwill
    of $11,027 and $9,836                         46,082      46,227
   Premises and equipment, net                    11,080      12,926
   Investments in unconsolidated entities         21,269      25,663
   Other assets                                   76,719      97,588
                                              ----------  ----------
       Total assets                           $2,034,285  $2,237,100
                                              ==========  ==========

 Liabilities and Equity
   Liabilities
     Match funded liabilities                 $  765,023  $  961,939
     Lines of credit and other secured
      borrowings                                 121,810     116,870
     Investment line                             176,668     200,719
     Servicer liabilities                         77,774     135,751
     Debt securities                             109,534     133,367
     Other liabilities                            88,932      78,813
                                              ----------  ----------
       Total liabilities                       1,339,741   1,627,459
                                              ----------  ----------

   Equity
     Ocwen Financial Corporation
      stockholders' equity 
      Common stock, $.01 par value; 
      200,000,000 shares authorized; 
      67,512,096 and 62,716,530
      shares issued and outstanding at
      June 30, 2009 and December 31, 2008,
      respectively                                   675         627
     Additional paid-in capital                  254,071     201,831
     Retained earnings                           437,840     404,901
     Accumulated other comprehensive income,
      net of income taxes                          1,649       1,876
                                              ----------  ----------
     Total Ocwen Financial Corporation
      stockholders' equity                       694,235     609,235
       Minority interest in subsidiaries             309         406
                                              ----------  ----------
     Total equity                                694,544     609,641
                                              ----------  ----------
       Total liabilities and equity           $2,034,285  $2,237,100
                                              ==========  ==========
CONTACT:  Ocwen Financial Corporation
          David J. Gunter, Executive Vice President &
           Chief Financial Officer
          (561) 682-8367
          David.Gunter@Ocwen.com