for Thank morning you, Hugo. us. thank joining and Good you
Today, are the Ocwen our and regarding reposition executing for initiatives we long-term update actions provide progress our key to and value profitability business I'll an creation. in
June CFO, follow of before Campbell, our with some quarter close questions. review call I will financial third will Our results. opening the with for it the remarks brief up XXXX then
Please turn to four. slide
progress down, With During and our and execution. a the proactively against continue encouraged continuous we substantial improvement. winding addressing I on third level high volatile quarter, initiatives growth to intensifying be integration we more activities our are environment. cost by and business straight and made while allocation focus key our of uncertain resource
integration finalize begin facilities are final legal of efforts and in simplification. our entity largely the phase to consolidation expect Our our we fourth complete. quarter, And the
approximate this million to target -- cost servicing adjusted million XXXX. of third quarter fourth levels, expect $XXX UVB expense the rate and are total by reengineering our $XXX At combined In of the track MSR third expense for savings We expenses $XXX achieve and the quarter, adjusted quarter annualized second XXXX least change. realized notables net excluding our annual to run annualized increasing XXXX. to valuation by to quarter the achieve we savings the million compared we Ocwen on expense at remain of current NPA adjustments objective
as no $XX funded there we plan billion market our from same XX% last of quarter of current for on loss despite as lending up change We lending in and to can execute believe was the the environment. recapture and NRZ channels over flow Volume volume we is and originate the year, our XXXX our up MSR HARP volume. in trials soon
MSR bulk $X end billion quarter, billion second purchases. Since the awarded been we’ve closed of the in and $X
higher continue and patient interest be in bulk and returns be considering believe We MSRs, and current deployment in to risks prudent what lower in we volatile our rates potential capital the the to market.
to build we sensitive derivative-based national a volatility hedges the through for program portfolio, that exposure interest partially heightened rate the in implemented while the lending a hedging Due third interest quarter, our channels. rate we hedge
our We and our reduce finance financing continued cost and to match funding the enhancements programs. MSR debt solutions implementation of through improved of structured to existing
actions and third the investment our near-term on million that hand and with planned closed We liquidity believe cash objectives. $XXX capital of position can our quarter support
to proactively progress as track and regulatory it to continue engage our We commitments. our relates regulators our
annualized sum our cash slide pretax the to loss nearly payments actions have amortization statement detailed of reduced income and XX%. by As excluding XX, notables date on lump NRZ
We expect lump sum notables in payments of fourth but statement pretax NRC income quarter breakeven approach of including amortization to XXXX. excluding the income
we no also are payments track and income pretax we the to are matters. current or to believe notables of Lastly, lump and regulatory sum by conditions market excluding profitability, achieve we and objectives quarter NRZ our adverse assume statement and achieve on there industry amortization of XXXX, pretax income targets changes both legal third
the taken five. a reshaping slide over independent cycles. servicer mortgage can diversified We past deliver XX have into to believe actions Ocwen originator and performance turn industry we mortgage are the through Please that months
including portfolio channels market, co-issue multiple in participations and portfolio very agency flow drive retention. to are relationships, lending, replenishment programs, growth, We correspondent quickly MSR bulk the building and
and mortgages, and residential service a core performing product government reverse in balance special and servicing include servicing. mortgage investor competency small forward and offerings and private subservicing agency and with commercial products, Our
and we competitive our With implementation of a the service of portfolio million we acquisition the PHH of cost believe the position and improved X.X plans. diversified billion for servicer $XXX we structure, range servicing have offering, service high improving and the due to meaningfully our product over an and agencies customers,
key to is competitive implementing what clear turn our roadmap reputation critical believe success access stakeholders, slide factors operational generation cost This satisfaction, Please financial execution, performance cost believe roadmap for to our are in performance, effective structure, We capital. and six. recapture and with and enhance and business portfolio to we are customer including and position. replenishment grounded actionable ancillary we a income competitive focus
cost factors an a efficiency level capability, industry replenishment subservicing capital portfolio with and including top identified a structured satisfaction, over vehicles objectives a own multichannel multiproduct building critical customer have the financing We quartile roughly structure, of leveraging maintaining and several and capital servicing and for mix that maintaining success high MSR align time. XX-XX of
Ocwen top Our key position industry to initiatives are with intended an servicer and cost mortgage a originator as quartile structure. high-quality
the Despite yield payments pretax investment, and we basis, the seven. sum on of by lump NRZ please profitability a unpredictable turn bulk target for quarter and income statement XXXX. to third slide Now, lower MSR expectations achieving excluding to MSR more volume asset of continue amortization notables
improvement approximately combination and We expect reduction be in million we the annualized that million corporate estimate cost higher will due as revenue driven volume adjusted additional from to lending by and reengineering, factors expense expense million debt, annualized increase currently $XXX from $XX of $XX pretax interest a earnings mix. lower of MSR
profitability servicing a at and and roadmap billion XX-XX Our UPB $XXX maintain achieve time. owned roughly portfolio we assumes subservice a least over of mix
However, on bulk vary we the rates especially dependent we while are quarter-over-quarter, expect MSR market. will MSR replenishment
also our vary result, from a may servicing quarter-to-quarter. As UPB
capital growth, on will provide to cost I regulatory achieve our details actions and objectives. structure, additional our now
Please slide turn to eight.
the structure: a expectations of size competitive based categories servicing focused reengineering, We on three improvement. highly achieve to reductions, on continuous the cost actions executing portfolio; of for cost cost synergies; including Integration-related are and expense merger
as cost continuous a viewing success. is strength for We're core future that improvement necessary
the improvement we quarter annualized million integrating of such, an As an cost reduction on efforts target third our one $XXX into by aggregate basis are all consolidated program total XXXX. with of
and Our enabled continuous optimizing technology improvement design strategic productivity on process enhancements. cost are offshoring, efforts lean focused sourcing,
technology impactful. Our relatively in investment but modest is highly
example, The the entire in processes have in reduced our organization our over cost efforts. XX%. of process robotic For resulted is applications highly initial times by continuous improvement cycle for effective automation engaged
incorporated target. Our have into some approximate and cost total reengineering employees which have submitted business of improvement ideas, our cost XXX been
cost survey Our the achieve industry per science overhead which servicing upon is data. and loan an and is not basis cost status. loan certain sustain Determining depending on industry servicing type to to cost [indiscernible] allocations, loan vary a and allocations an available because with cost per top loan and and our servicing MBA We because overhead and legacy comparable other our per exact will we quartile position cost benchmark operations. objective competitiveness without measure servicing competitiveness
marginal However, we believe caveats, per with loan servicing we the quarter. these cost in that fourth for will top quartile performance achieve
fully our that competitors in efficiency We're efforts. aware are similar also engaged
$XX we maintain the our these related believe that over end quarter, remain to we of improvement As XXXX. incurring costs. estimate total effort million program of in approximately prior such, costs our to of in We continuous of cost incurred $XX top be a reengineering third Through to million upfront time. cost the quartile needs
cost to incur need increasing are that in currently because total upfront evaluating will target. of our XXXX we We additional costs savings
cost scale. our long-term structure, reengineering leading size in cost believe a profitability adequate requirements cannot servicing intend growth portfolio make appropriate Therefore, in relatively we investments of is servicing progress of to we aligned be that to that ensure the our with high our fixed sustained Despite without mortgage business.
our Growing nine. a lending hedge business is mix a servicing slide top we as to and priority business to look create a turn Please natural balanced more a to portfolio.
XX% NRZ lending despite year, quarter in recapture same loss and volume Our in of volume. was the up HARP the third last the quarter
recapture made and seeing lending from our build are positive out results lending We we our platform. correspondent the improvement to
operations and to relationships In have lending, lenders have correspondent correspondent our with established date. been optimizing XX we over
June, counterparties MSR with, in window in launching our of expect in achieving through We a million month number continued loss $XXX of purchases volume grown the our targets. the win to do and growth October. and business line agency have we correspondent cash with we're prudent program in rates Since correspondent
MSR XX% per we In productivity. our in processor our in actions $X.X approximately a built In and improvement purchase pipeline in have underwriter addition, opportunities. resulted over month of flow platform, sales, recapture billion loan have
continuing staffing critical process defined executing to technology and are in of channel this a invest increases, roadmap We and upgrades. improvements business are
more funded $X.X in volume run double solid for the October. solicitation. our lending will channel of We actions believe these have our rate realized related growth of of we portfolio recapture refinancing billion annual month eligible achieved for than Overall, and runoff origination rate
addition explore In organic opportunities to M&A our to growth accelerate we actions. to continue initiatives, and growth our organic complement
that cycles. lending focused volume on significant are through generate mortgage targets can potential We
and while sizable represent business optimum Assuming mix. highest best certain expected we attributes platform acquisition to lending return a investment levels, could our more on contributing a and business alternatives of believe valuation the
be However, we transaction that assurances no such provide consummated. can any will
market. in track from benefits opportunities, billion totaling from the positive tends a of RFP recent our are substantial business activity the prolonged, opportunities be received believe subservicing over available to The the cycle on-site by prospects. starting continue We integration subservicing marketing $XX are encouraged we progress we UPB and to and have but see pipeline from to feedback and in
$XX bulk totaling of closed transactions billion level the end quarter. and second $X to engagement, second of in coming review required market. risk the our $X UPB market billion We the of accept awarded for servicing market as we end the to in are larger Despite higher win billion since significant MSR of quarter, bulk on we are the the the since packages unwilling return levels UPB lower to only
did sellers We sell expectations. sellers strong seller mortgage one-third valuation view we experience About incentives impact well evaluated flow cash partly value, may meet is levels recent the as as MSR which not which freight originators, may as buyers for of bid volatile environment, to by reduce and and transact. of disconnect believe the transactions uncertain more this your driven could not
that of rate with protections on recapture transactions to imposing sellers as with of bidding and close, timeframe buyers and for fixed buyers at are price seeing driven of closing. MSR risk. for valuation particularly from and afforded we to accept adjustments transactions, the favoring are level portion In a to activity it to rate industry For prepayment changes deal typically willing transactions prepayment restrictions terms, respect reducing riskier certain did the if time appears no
reaction expectations Asset be down, to rates. coming yield the overall market a to appear decline in
to X% concessions, into an approximately our of patient we for on decided which without MSRs a ROA unreasonable we amount risk unwilling of Although to appropriate equity to are lower X.X%, agency have return translates leverage pretax XX%. minimum from take
confirm sellers to extent is will opportunities that MSR MSR continue focused gain interest future rate sell capital of decline with to recent Nevertheless, sustainable a to trends in We uncertainty provide appropriate in on risk-adjusted greater and the us MSR the be willingness and replenishment on growing returns. refinancing market and lower believe MSR there levels. the volume recent allocating of margins by demonstrate transact to a developing We flow the in channels. importance from our bulk the lending sources
XX. slide to Please turn
to investment continue liquidity financial capital position and actions our enhance support objectives. We near-term and flexibility targeted can believe our our
borrowings and as corporate MSR of million $XXX third we approximate quarter offsetting MSR actions under corporate and were financing essentially million $XXX our the our repaid have debt retirement facility During financing debt. of
was position ABS refinancing million servicing executed bolstered of early August. liquidity of Our in $XXX OMART a advance by term
Despite higher able in We additional of an a to attractive record advance ability rate resulted all-time market capital of our this extreme for we’re variety funding to at demonstrates in transaction achieve OMART. capital under funding rates cost markets volatility, $XX lows and access that capital million conditions. believe
As of that of to evaluating could are up we in structured capital opportunities our part $XXX structure optimization, result incremental million finance additional funding.
two-year process finalizing in new Ginnie $XX the a to this to as quarter, close to servicing $XX As $XXX initial the financing term based on Mae and Ginnie facility borrowing completing XXth. The acknowledgement effort, fourth million of Mae have we expect to facility of our documentation. portfolio a facility million, should MSR of part the approximate is and September subject expected million Mae Ginnie size
We the continue grow capital to ability to requirements acquisitions. MSR to significantly evaluate us vehicles capital servicing with alternativeness compared that UPB lower our with could for MSR provide
with agency our an invested currently MSR portfolio investment be our aligned and vehicle into arrangements enter and that also partners MSRs are objectives. would subservicing thus in and We require alongside would We recapture envisioning us.
vehicle [ph] expect X the MSR quarter be next We MSR then The our focus XX investor and to begin of in area over to strategy an phase the next and months. of fourth the next year. capital financing early potential interest will
to We costs. $XX we prudent on capital and extent we structure positive due based As to a secured well alternative date maturity combined impact use approximately capital our secured of notes an capital returns the leverage returns our million third part look due initiatives can capital the X.XXX% risk-adjusted use in to of of we business additional believe our repurchases the comes debt be disciplined on approach appropriate service at we in actions loan, repurchased investment momentum and liquidity quarter. the term We our are allocation, positive consider allocate extend as the capital. during senior will which December as positive this repayment of or debt our with as senior our factors unable XXXX of was To believe XXXX.
to Please slide XX. turn
track to engage continue We proactively progress commitments. our relates to our and regulators as regulatory it
that third quarter, findings. resulted regulatory several material the were in no adverse completed During reviews
continue fulfilling focus culture on We to driving compliance strong and our regulatory commitments.
consensus. an the we to our allege In impermissible the both complaint court rulings prejudice the between The filed in complain. amendment and affirmative to CFPB CFPB the we fact CFPB’s held and on filed the pleading matter, November received was and the third engaged CFPB court the shotgun matters the quarter, court the distinguish and must our motions On all specifically that that claims. because answer permitted its CFPB and Xst, without case repeat Florida to In dismissed CFPB back entire date XXXX. dismiss that found April
matter, which at claims part our a the claim to In Florida longer prejudice fourth these no claims of and the motion means court case. of are granted part three with claim, the dismiss the
and In did addition, because found case, November court re-plead so Florida in permitted pleading. Florida to CFPB the was without its Xst. like the dismissed Florida shotgun in had impermissible the case that also prejudice engaged case on they
reorganized unchanged. the review cases, We of amended are revised that some been our but it response appears the and our in counts pleading. planning remain complaint, the narrowed have reviewing remain to into and Based new substantially allegations we on
and continue vigorously to to the ourselves. Florida and We we matters the factual believe we in defenses allegations defend and CFPB continue legal to have
turn the June who over results quarter. for discuss will I'll to Now, the
