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Ocwen Financial Announces Operating Results for Third Quarter 2018

November 6, 2018

-- Reported a net loss of $41 million, or $0.31 per share -- Ended the quarter with $255 million of cash -- Completed acquisition of PHH Corporation for $358 million in cash -- Glen A. Messina became the President and Chief Executive Officer of Ocwen and a member of its Board of Directors -- Helped over 9,100 struggling families remain in their homes through loan modifications

WEST PALM BEACH, Fla., Nov. 06, 2018 (GLOBE NEWSWIRE) -- Ocwen Financial Corporation (NYSE:OCN) (Ocwen or the Company), a leading financial services holding company, today announced operating results for the third quarter of 2018. Ocwen reported a GAAP net loss of $(41.1) million, or $(0.31) per share, for the three months ended September 30, 2018 compared to a net loss of $(6.1) million for the three months ended September 30, 2017. Ocwen generated revenue of $238.3 million and Cash Flows from Operating Activities of $93.7 million for the three months ended September 30, 2018, and ended the quarter with $254.8 million of cash.

Glen A. Messina, President and CEO of Ocwen, said, “We believe our acquisition of PHH on October 4, 2018 provides us with the opportunity to transform to a stronger, more efficient company, better able to serve our customers and clients, and positions us for a return to growth and profitability. In the near term, our goal is returning to profitability in the shortest timeframe possible, taking into consideration the robust, prudent integration process we are undertaking. We believe our return to profitability will largely depend on realization of acquisition synergies and our ability to replenish portfolio runoff, among other factors.”

Mr. Messina continued, “Based on the Company’s current situation and our assessment of the current industry environment, we have established a set of initiatives to enable our return to profitability and improve our competitive position. In the near term, we will be focused on executing the integration, re-engineering our cost structure, returning to growth and fulfilling our regulatory commitments. Throughout this process, Ocwen will continue its long-standing commitment to enabling and preserving homeownership for underserved and at-risk customers, and this core value will continue to be a guiding principle as we move the Company forward.”

Third Quarter 2018 Results

Pre-tax loss for the third quarter of 2018 was $(40.3) million, a $(13.7) million increase from the third quarter of 2017.

The Servicing segment recorded $(13.9) million of pre-tax loss for the third quarter of 2018. The business was negatively impacted by lower revenue from a smaller portfolio and higher professional fees. We also recorded gains related to our investments in seasoned residential loans acquired through executing RMBS call rights in the second quarter of 2018, which were not repeated in the third quarter.

The Lending segment recorded $(2.1) million of pre-tax loss for the third quarter of 2018. Our reverse mortgage lending business recorded $(0.9) million of pre-tax loss and our forward lending recapture business incurred a $(1.2) million pre-tax loss. Both businesses have been negatively impacted by higher interest rates. In addition, the reverse mortgage lending industry continues to adjust to the impact of HUD program changes introduced in the fourth quarter of 2017.

The Corporate segment recorded a $(24.3) million pre-tax loss for the third quarter of 2018, which includes $(12.5) million of corporate interest expense and $(9.1) million of CFPB and state regulatory related legal fees and escrow related testing expenses.

Additional Third Quarter 2018 Business Highlights

-- The combined Ocwen and PHH servicing portfolio totaled 1.7 million loans representing unpaid principal balance of $287 billion as of September 30, 2018. -- Completed 9,179 modifications in the quarter to help struggling families stay in their homes, 15% of which included debt forgiveness totaling $44 million. -- Delinquencies decreased from 8.3% at June 30, 2018 to 7.8% at September 30, 2018, primarily driven by loss mitigation efforts. -- The constant pre-payment rate (CPR) decreased from 14.3% in the second quarter of 2018 to 13.7% in the third quarter of 2018. In the third quarter of 2018, prime CPR was 16.2%, and non-prime CPR was 12.4%. -- In the third quarter of 2018, Ocwen originated forward and reverse mortgage loans with unpaid principal balances of $172.3 million and $147.5 million, respectively. -- Our reverse mortgage portfolio ended the quarter with an estimated $98.4 million in undiscounted future gains from forecasted future draws on existing loans. Neither the anticipated future gains nor the future funding liability are included in the Company’s financial statements.

Webcast and Conference Call

Ocwen will host a webcast and conference call on Tuesday, November 6, 2018, at 8:30 a.m., Eastern Time, to discuss its financial results for the third quarter of 2018. The conference call will be webcast live over the internet from the Company’s website at www.Ocwen.com, click on the “Shareholders” section. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

About Ocwen Financial Corporation

Ocwen Financial Corporation is a financial services holding company which, through its subsidiaries, services and originates loans. We are headquartered in West Palm Beach, Florida, with offices throughout the United States and in the U.S. Virgin Islands and operations in India and the Philippines. We have been serving our customers since 1988. We may post information that is important to investors on our website (www.Ocwen.com).

Forward Looking Statements

This press 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. These forward-looking statements may be identified by a reference to a future period or by the use of forward-looking terminology. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “strategy”, “plan” “target” and “project” or conditional verbs such as “will”, “may”, “should”, “could” or “would” or the negative of these terms, although not all forward-looking statements contain these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Our business has been undergoing substantial change which has magnified such uncertainties. Readers should bear these factors in mind when considering such statements and should not place undue reliance on such statements. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. In the past, actual results have differed from those suggested by forward looking statements and this may happen again.

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: our ability to successfully integrate PHH’s business, and to realize the strategic objectives, synergies and other benefits of the acquisition at the time anticipated or at all, including our ability to integrate, maintain and enhance PHH’s servicing, subservicing and other business relationships, including its relationship with New Residential Investment Corp. (NRZ), uncertainty related to claims, litigation, cease and desist orders and investigations brought by government agencies and private parties regarding our servicing, foreclosure, modification, origination and other practices, including uncertainty related to past, present or future investigations, litigation, cease and desist orders and settlements with state regulators, the Consumer Financial Protection Bureau (CFPB), State Attorneys General, the Securities and Exchange Commission (SEC), the Department of Justice or the Department of Housing and Urban Development (HUD) and actions brought under the False Claims Act by private parties on behalf of the United States of America regarding incentive and other payments made by governmental entities; adverse effects on our business as a result of regulatory investigations, litigation, cease and desist orders or settlements; reactions to the announcement of such investigations, litigation, cease and desist orders or settlements by key counterparties or others, including lenders, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae); our ability to comply with the terms of our settlements with regulatory agencies and the costs of doing so, increased regulatory scrutiny and media attention; any adverse developments in existing legal proceedings or the initiation of new legal proceedings; our ability to effectively manage our regulatory and contractual compliance obligations; our ability to comply with our servicing and subservicing agreements, including our ability to comply with our agreements with, and the requirements of, Fannie Mae, Freddie Mac and Ginnie Mae and maintain our seller/servicer and other statuses with them; our ability to contain and reduce our operating costs, the adequacy of our financial resources, including our sources of liquidity and ability to sell, fund and recover advances, repay borrowings and comply with our debt agreements, including the financial and other covenants contained in them; our ability to timely transfer mortgage servicing rights under our agreements with NRZ; our ability to maintain our long-term relationship with NRZ; our ability to realize anticipated future gains from future draws on existing loans in our reverse mortgage portfolio; our servicer and credit ratings as well as other actions from various rating agencies, including the impact of prior or future downgrades of our servicer and credit ratings; our ability to execute an effective chief executive officer leadership transition; as well as other risks detailed in Ocwen’s and, prior to the merger closing, PHH’s reports and filings with the SEC, including each of their respective annual reports on Form 10-K for the year ended December 31, 2017 and any current and quarterly reports since such date. Anyone wishing to understand Ocwen’s business should review its and PHH’s SEC filings. Ocwen’s forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.

FOR FURTHER INFORMATION CONTACT:

Investors: Media: Stephen Swett John Lovallo T: (203) 614-0141 T: (917) 612-8419 E: shareholderrelations@ocwen.com E: jlovallo@levick.com

Residential Servicing Statistics (Dollars in thousands) At or for the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2018 2018 2018 2017 2017 --------------- --------------- --------------- --------------- --------------- Total unpaid principal balance $ 160,996,474 $ 167,127,014 $ 173,388,876 $ 179,352,554 $ 187,468,318 of loans and REO serviced Non-performing loans and REO serviced as a % of total UPB 7.8 % 8.3 % 9.0 % 9.3 % 9.4 % (1) Prepayment speed (average CPR) 13.7 % 14.3 % 12.9 % 14.4 % 14.7 % (2) (3)

1. Performing loans include those loans that are less than 90 days past due and those loans for which borrowers are making scheduled payments under loan modification, forbearance or bankruptcy plans. We consider all other loans to be non-performing. 2. Constant Prepayment Rate for the prior three months. CPR measures prepayments as a percentage of the current outstanding loan balance expressed as a compound annual rate. 3. Average CPR for the three months ended September 30, 2018 includes 16.2% for prime loans and 12.4% for non-prime loans.

Segment Results (Dollars in thousands) For the Three Months For the Nine Months Ended Ended September 30, September 30, 2018 2017 2018 2017 ----------- ----------- ----------- ----------- Servicing Revenue $ 217,630 $ 246,545 $ 674,233 $ 802,347 Expenses 185,077 218,565 523,061 637,406 Other expense, net (46,452 ) (22,299 ) (142,504 ) (146,911 ) --------- - --------- - --------- - --------- - Income (loss) before income taxes (13,899 ) 5,681 8,668 18,030 --------- - --------- - --------- - --------- - Lending Revenue 16,917 31,935 65,116 95,457 Expenses 18,954 38,412 57,036 100,628 Other income (expense), net (28 ) (1,092 ) 26 (1,901 ) --------- - --------- - --------- - --------- - Income (loss) before income taxes (2,065 ) (7,569 ) 8,106 (7,072 ) --------- - --------- - --------- - --------- - Corporate Items and Other Revenue 3,731 6,162 12,767 20,002 Expenses 13,495 16,502 49,580 92,308 Other expense, net (14,545 ) (14,325 ) (43,674 ) (37,311 ) --------- - --------- - --------- - --------- - Loss before income taxes (24,309 ) (24,665 ) (80,487 ) (109,617 ) --------- - --------- - --------- - --------- - Consolidated loss before income taxes $ (40,273 ) $ (26,553 ) $ (63,713 ) $ (98,659 ) - ------- - - ------- - - ------- - - ------- -

OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) For the Three Months For the Nine Months Ended Ended September 30, September 30, 2018 2017 2018 2017 ----------- ----------- ----------- ----------- Revenue Servicing and subservicing fees $ 213,730 $ 233,220 $ 658,095 $ 761,523 Gain on loans held for sale, net 16,942 25,777 61,135 76,976 Other 7,606 25,645 32,886 79,307 --------- - --------- - --------- - --------- - Total revenue 238,278 284,642 752,116 917,806 --------- - --------- - --------- - --------- - Expenses Compensation and benefits 63,307 90,538 211,220 272,750 Professional services 40,662 38,417 110,821 145,651 MSR valuation adjustments, net 41,448 33,426 91,695 115,446 Servicing and origination 31,758 52,246 91,452 128,061 Technology and communications 20,597 27,929 67,306 79,530 Occupancy and equipment 11,896 15,340 37,369 49,569 Other 7,858 15,583 19,814 39,335 --------- - --------- - --------- - --------- - Total expenses 217,526 273,479 629,677 830,342 --------- - --------- - --------- - --------- - Other income (expense) Interest income 3,963 4,099 10,018 12,101 Interest expense (61,288 ) (47,281 ) (189,601 ) (212,471 ) Gain (loss) on sale of mortgage servicing rights, net (733 ) 6,543 303 7,863 Other, net (2,967 ) (1,077 ) (6,872 ) 6,384 --------- - --------- - --------- - --------- - Total other expense, net (61,025 ) (37,716 ) (186,152 ) (186,123 ) --------- - --------- - --------- - --------- - Loss before income taxes (40,273 ) (26,553 ) (63,713 ) (98,659 ) Income tax expense (benefit) 845 (20,418 ) 4,541 (15,465 ) --------- - --------- - --------- - --------- - Net loss (41,118 ) (6,135 ) (68,254 ) (83,194 ) Net income attributable to non-controlling interests (29 ) (117 ) (176 ) (289 ) --------- - --------- - --------- - --------- - Net loss attributable to Ocwen stockholders $ (41,147 ) $ (6,252 ) $ (68,430 ) $ (83,483 ) - ------- - - ------- - - ------- - - ------- - Loss per share attributable to Ocwen stockholders Basic $ (0.31 ) $ (0.05 ) $ (0.51 ) $ (0.66 ) Diluted $ (0.31 ) $ (0.05 ) $ (0.51 ) $ (0.66 ) Weighted average common shares outstanding 133,912,42 128,744,15 133,632,90 125,797,77 Basic 5 2 5 7 133,912,42 128,744,15 133,632,90 125,797,77 Diluted 5 2 5 7

OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) September 30, December 31, 2018 2017 ------------- ------------- Assets Cash $ 254,843 $ 259,655 Mortgage servicing rights ($999,282 and $671,962 carried at fair value) 999,282 1,008,844 Advances, net 166,024 211,793 Match funded assets (related to variable interest entities (VIEs)) 935,080 1,177,357 Loans held for sale ($145,417 and $214,262 carried at fair value) 217,436 238,358 Loans held for investment, at fair value (amounts related to VIEs of $28,373 and 5,307,560 4,715,831 $0) Receivables, net 155,937 199,529 Premises and equipment, net 25,873 37,006 Other assets ($7,826 and $8,900 carried at fair value)(amounts related to VIEs of 399,002 554,791 $19,954 and $27,359) ----------- - ----------- - Total assets $ 8,461,037 $ 8,403,164 - --------- - - --------- - Liabilities and Equity Liabilities HMBS-related borrowings, at fair value $ 5,184,227 $ 4,601,556 Match funded liabilities (related to VIEs) 714,246 998,618 Other financing liabilities ($646,842 and $508,291 carried at fair value)(amounts 719,319 593,518 related to VIEs of $26,643 and $0) Other secured borrowings, net 345,425 545,850 Senior notes, net 347,749 347,338 Other liabilities ($2,567 and $635 carried at fair value) 589,327 769,410 ----------- - ----------- - Total liabilities 7,900,293 7,856,290 ----------- - ----------- - Equity Ocwen Financial Corporation (Ocwen) stockholders’ equity Common stock, $.01 par value; 200,000,000 shares authorized; 133,912,425 and 131,484,058 shares issued and outstanding at September 30, 2018 and December 31, 1,339 1,315 2017, respectively Additional paid-in capital 553,443 547,057 Retained earnings (accumulated deficit) 5,909 (2,083 ) Accumulated other comprehensive loss, net of income taxes (1,135 ) (1,249 ) ----------- - ----------- - Total Ocwen stockholders’ equity 559,556 545,040 Non-controlling interest in subsidiaries 1,188 1,834 ----------- - ----------- - Total equity 560,744 546,874 ----------- - ----------- - Total liabilities and equity $ 8,461,037 $ 8,403,164 - --------- - - --------- -

OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Nine Months Ended September 30, 2018 2017 ----------- ----------- Cash flows from operating activities Net loss $ (68,254 ) $ (83,194 ) Adjustments to reconcile net loss to net cash provided by operating activities: MSR valuation adjustments, net 91,695 115,446 Gain on sale of mortgage servicing rights, net (303 ) (7,863 ) Provision for bad debts 40,269 57,274 Depreciation 18,199 20,430 Loss on write-off of fixed assets - 6,834 Amortization of debt issuance costs 2,261 1,979 Equity-based compensation expense 1,244 4,489 Gain on valuation of financing liability (11,323 ) (27,024 ) Net gain on valuation of mortgage loans held for investment and HMBS-related (8,057 ) (18,637 ) borrowings Gain on loans held for sale, net (24,265 ) (39,542 ) Origination and purchase of loans held for sale (1,234,830) (3,074,725) Proceeds from sale and collections of loans held for sale 1,154,526 3,067,522 Changes in assets and liabilities: Decrease in advances and match funded assets 243,831 285,066 Decrease in receivables and other assets, net 126,829 160,169 Decrease in other liabilities (46,767 ) (66,321 ) Other, net 6,478 3,466 --------- - --------- - Net cash provided by operating activities 291,533 405,369 --------- - --------- - Cash flows from investing activities Origination of loans held for investment (711,035 ) (961,642 ) Principal payments received on loans held for investment 296,800 311,560 Purchase of mortgage servicing rights (2,729 ) (1,658 ) Proceeds from sale of mortgage servicing rights 6,138 2,263 Proceeds from sale of advances 7,882 6,119 Issuance of automotive dealer financing notes (19,642 ) (129,471 ) Collections of automotive dealer financing notes 52,598 119,389 Additions to premises and equipment (7,326 ) (7,365 ) Other, net 5,446 1,480 --------- - --------- - Net cash used in investing activities (371,868 ) (659,325 ) --------- - --------- -

OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS — (continued) (Dollars in thousands) For the Nine Months Ended September 30, 2018 2017 ----------- ----------- Cash flows from financing activities Repayment of match funded liabilities, net (284,372 ) (252,981 ) Proceeds from mortgage loan warehouse facilities and other secured borrowings 2,211,606 5,810,591 Repayments of mortgage loan warehouse facilities and other secured borrowings (2,585,286) (6,016,169) Proceeds from sale of mortgage servicing rights accounted for as a financing 279,586 54,601 Proceeds from sale of reverse mortgages (HECM loans) accounted for as a financing 728,745 981,730 (HMBS-related borrowings) Repayment of HMBS-related borrowings (290,338 ) (287,908 ) Issuance of common stock — 13,913 Capital distribution to non-controlling interest (822 ) — Other, net (991 ) (2,321 ) --------- - --------- - Net cash provided by financing activities 58,128 301,456 --------- - --------- - Net increase (decrease) in cash and restricted cash (22,207 ) 47,500 Cash and restricted cash at beginning of year 302,560 302,398 --------- - --------- - Cash and restricted cash at end of period (1) $ 280,353 $ 349,898 - ------- - - ------- - (1) Cash and restricted cash as of September 30, 2018 and September 30, 2017 includes $254.8 million and $299.9 million of cash and $25.5 million and $50.0 million of restricted cash respectively.

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