WEST PALM BEACH, Fla., Aug. 5, 2008 (GLOBE NEWSWIRE) -- Ocwen Financial Corporation ("Ocwen" or the "Company") (NYSE:OCN) today reported income from continuing operations of $5.3 million for the second quarter of 2008 as compared to $27.4 million for the second quarter of 2007. For the three months ended June 30, 2008, pre-tax income before discontinued operations was $7.4 million, compared to $42.2 million a year ago. Pre-tax profit in the second quarter of 2008 included $33.7 million of valuation losses on financial assets, losses on investments in unconsolidated entities and Bankhaus Oswald Kruber GmbH & Co. ("BOK"), our German banking subsidiary, while pre-tax profit in the second quarter of 2007 included a $25.6 million gain on the sale of residuals in the United Kingdom.

Net income was $0.1 million for the second quarter of 2008. This compares to $27.2 million or $0.39 per diluted share for the second quarter of 2007. Loss from discontinued operations was $5.2 million for the second quarter of 2008 as compared to $0.2 million for the second quarter of 2007. Discontinued operations represent the results of BOK. The loss from discontinued operations for the second quarter of 2008 includes $5.0 million of impairment charges and write-downs to reduce BOK's assets to fair value. Management is actively pursuing the sale of BOK and potential investors are performing due diligence.

Chairman and CEO William Erbey stated, "Ocwen continues to produce strong operating results as indicated by our record levels of revenue and income from operations. Revenues of $131.2 million are $14.3 million or 12.2% higher than the second quarter of 2007. Our operating expenses of $83.8 million are at their lowest level since the third quarter of 2006. As a result, our income from operations of $47.4 million for the second quarter improved over the same quarter last year by $19.7 million or 71.1% which more than offset the increase of $5.0 million in interest expense. In fact, interest expense has decreased from the first quarter by $4.8 million.

"Our liquidity position has continued to strengthen since the second quarter of last year. Advances declined in the second quarter by $91.3 million which reduces our financing requirements. While advances and the need for funding continue to decline, we have continued to close financing facilities. We closed a new $300 million facility in April to offset the expiration of a $200 million temporary facility that we established in September of 2007 and a $75 million three year medium term note that was issued in May 2005. The second quarter closed with $334.2 million in excess advance financing with additional funding facilities in the pipeline. We also renewed our Investment Line related to auction rate securities through June 30, 2009.

"With our liquidity position strengthened, we intend to pursue the acquisition of servicing portfolios in conjunction with private equity firms. This will enable Ocwen to continue to pursue an asset light strategy. Given our cost structure and ability to reduce delinquencies, we believe that Ocwen can be an effective acquirer. In comparison to data provided by a third party industry valuation expert, our cost to service non-performing loans is less than half of the industry average.

"Our net income has been adversely affected by declining fair values of financial assets. We will continue to actively pursue the liquidation of our positions in residuals ($4.9 million), loans held for resale ($59.6 million), REO ($7.2 million) and auction rate securities ($254.7 million) which have been reduced by a combined total of $45.3 million for the quarter. Valuation losses on financial assets when combined with losses on investments in unconsolidated entities and BOK totaled $33.7 million for the second quarter of 2008."

Ocwen Asset Management:

The Servicing segment produced revenues of $92.4 million which were 5.5% higher than the second quarter of 2007 and 6.8% higher as compared to the first quarter of 2008. A significant component of the loss mitigation efforts for the quarter included 20,703 loan modifications which kept borrowers in their homes and cash flowing to investors. A reduction in operating expenses of $16.8 million or 28.3% contributed to growth in total income from operations of 76.1% and pre-tax income of 134.5%.

The Loans and Residuals segment reported a pre-tax loss of $5.4 million as increases in delinquencies and decreases in property values generated losses on vestigial portfolios of trading securities and loans held for resale of $1.4 million and $3.4 million, respectively. For the same quarter one year ago, the gain on sale of the UK residuals of $25.6 million coupled with $6 million of interest income earned related to a larger portfolio of loans held for resale generated pre-tax income of $25.4 million.

The Asset Management Vehicles segment, which includes unconsolidated entities accounted for by the equity method, reported a loss of $1.5 million for the second quarter that was impacted by rising delinquency assumptions within the residuals portfolio and decreasing property valuation assumptions in the loan portfolio.

Ocwen Solutions:

The Technology Products segment delivered $14.2 million in second quarter revenues and $4.4 million in total income from operations which were increases over the same quarter last year of 40.7% and 74.8% respectively. However, hedging losses and unrealized losses from holdings of auction rate securities at Bankruptcy Management Solutions resulted in a loss of $13.6 million in equity in earnings of unconsolidated subsidiaries leaving Technology Products with a pre-tax loss of $11.0 million for the quarter.

The Mortgage Services segment improved total income from operations by $1.2 million or 51.4% and pre-tax income by $2.0 million or 95.8% as staff reductions and the elimination of non-performing businesses more than offset a reduction in revenues of $2.7 million or 15.5%.

The Financial Services segment includes the results of Nationwide Credit, Inc. which was acquired in June 2007. On a sequential basis against the first quarter, this segment reported a revenue decrease of $0.5 million or 2.4% as the first quarter is typically the strongest quarter. Investments in new business and accelerated depreciation on a dialer that is soon to be retired contributed to a pre-tax loss of $2.6 million.

Corporate:

Corporate and other included losses on trading securities of $8.4 million due primarily to unrealized losses on AAA-rated, FFELP student loan-backed auction rate securities marked at 94.5% and a gain on debt purchases of $3.6 million reflecting the repurchase of convertible notes at a discount during the second quarter.

Total assets are $91.5 million or 3.8% higher than at December 31, 2007 due to the consolidation of $254.7 million in auction rate securities offset by decreases in all other asset classes other than Cash. Total liabilities increased by $82.8 million or 4.6% over December 31, 2007 as the Investment Line of $229.8 million was partially offset by decreases in lines of credit, servicer liabilities and debt securities.

Ocwen Financial Corporation is a leading business process outsourcing provider to the financial services industry, specializing in loan servicing, mortgage fulfillment and receivables management services. Ocwen is headquartered in West Palm Beach, Florida with offices in Arizona, California, Florida, Georgia, and New York and global operations in Canada, Germany and India. Utilizing our global infrastructure, 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, 2007 and Form 10-Q for the quarters ended June 30, 2007 and 2008 and our Forms 8-K filed during 2007 and 2008. 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.

 Segment Results (In thousands)

 For the periods                  Three months           Six months
  ended June 30,                 2008      2007       2008      2007
                              ------------------   ------------------
 Ocwen Asset Management
  Servicing
   Revenue                    $ 92,414  $ 87,607   $178,926  $179,204
   Operating expenses           42,508    59,264     84,312   121,770
    Income from
     operations                 49,906    28,343     94,614    57,434
   Other expense, net          (17,829)  (14,664)   (40,961)  (24,838)
    Income from
     continuing operations
     before income taxes        32,077    13,679     53,653    32,596

  Loans and Residuals
   Revenue                          --       302         --       346
   Operating expenses            3,092     3,669      7,454     6,540
     Loss from operations       (3,092)   (3,367)    (7,454)   (6,194)
   Other income (expense),
    net                         (2,334)   28,734     (1,608)   28,888
     Income (loss) from
      continuing operations
      before income taxes       (5,426)   25,367     (9,062)   22,694

  Asset Management Revenue       1,127        --      2,178        --
   Operating expenses            1,156        87      2,013       160
     Income (loss) from
       operations                  (29)      (87)       165      (160)
   Other expense, net           (1,479)       --     (3,286)       --
     Loss from continuing
      operations before
      income taxes              (1,508)      (87)    (3,121)     (160)
       Income from
        continuing
        operations before
        income taxes            25,143    38,959     41,470    55,130

 Ocwen Solutions
  Technology Products
   Revenue                      14,188    10,083     25,415    19,180
   Operating expenses            9,799     7,572     18,681    14,912
     Income from
      operations                 4,389     2,511      6,734     4,268
   Other expense, net          (15,421)     (875)    (8,154)     (667)
     Income (loss) from
      continuing operations
      before income taxes      (11,032)    1,636     (1,420)    3,601

  Mortgage Services
   Revenue                      14,495    17,151     31,249    33,482
   Operating expenses           10,945    14,807     24,463    29,001
     Income from
      operations                 3,550     2,344      6,786     4,481
   Other (income)
    expense, net                   456      (298)       367      (348)
     Income from continuing
      operations before
      income taxes               4,006     2,046      7,153     4,133

  Financial Services
   Revenue                      19,030     6,343     38,529     8,130
   Operating expenses           21,128     7,419     40,139     9,466
     Loss from operations       (2,098)   (1,076)    (1,610)   (1,336)
   Other expense, net             (494)     (141)      (962)     (140)
     Loss from continuing
      operations before
      income taxes              (2,592)   (1,217)    (2,572)   (1,476)
       Income (loss) from
        continuing
        operations
        before income
        taxes                   (9,618)    2,465      3,161     6,258

  Corporate Items and Other
   Revenue                         134        10        142       785
   Operating expenses            3,344       607     11,979     2,865
    Loss from operations        (3,210)     (597)   (11,837)   (2,080)
   Other income
    (expense), net              (4,879)    1,367    (15,910)    2,030
     Income (loss) from
      continuing operations
      before income
      taxes                     (8,089)      770    (27,747)      (50)

  Consolidated income from
   continuing operations
   before income taxes        $  7,436  $ 42,194   $ 16,884  $ 61,338


 Residential Servicing Statistics
 (Dollars in thousands)

                           At or for the three months ended
              --------------------------------------------------------
                June        March     December    September     June
              30, 2008    31, 2008    31, 2007    30, 2007    30, 2007

 Total unpaid
  principal
  balance
  of loans
  and REO
  serviced
  (1)      $44,831,875 $49,319,762 $52,747,836 $55,662,286 $53,122,085

 Non-performing
  loans and
  REO serviced
  as a percent
  of total
  (2)           22.4%       21.8%       19.6%       14.6%       11.1%
 Prepayment
  speed
  (average CPR)   26%         23%         21%         22%         23%

 (1) Excluding REO serviced pursuant to our contract with the U.S.
     Department of Veterans Affairs.
 (2) Loans for which borrowers are making scheduled payments under
     forbearance or bankruptcy plans are considered performing loans.

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

   For the periods            Three months             Six months
    ended June 30,          2008        2007        2008        2007
                         ---------    --------   ---------   ---------
   Revenue
    Servicing and
     subservicing
     fees                $ 100,688    $ 92,925   $ 198,902   $ 184,637
    Process management
     fees                   27,391      20,654      54,341      40,550
    Other revenues           3,146       3,347       6,233       6,722
      Total revenue        131,225     116,926     259,476     231,909

   Operating expenses
    Compensation and
     benefits               32,120      24,320      61,522      44,517
    Amortization of
     servicing rights       14,592      27,551      28,606      59,788
    Servicing and
     origination            11,638      15,269      26,049      28,928
    Technology and
     communications          6,421       5,307      11,691       9,993
    Professional services    6,336       6,407      21,085      12,962
    Occupancy and
     equipment               5,807       5,545      12,340      10,888
    Other operating
     expenses                6,908       4,826      14,068       8,704
      Total operating
       expenses             83,822      89,225     175,361     175,780

   Income from
    operations              47,403      27,701      84,115      56,129

   Other income (expense)
     Interest income         3,231       9,235       8,044      19,201
     Interest expense      (20,242)    (15,222)    (45,280)    (30,250)
     Gain (loss) on
      trading
      securities            (9,722)     23,551     (21,745)     19,080
     Gain on debt
      repurchases            3,595          --       3,595          --
     Loss on loans held
      for resale, net       (3,373)       (150)     (4,418)     (2,693)
     Equity in losses
      of unconsolidated
      entities             (14,655)       (421)     (7,700)       (178)
     Other, net              1,199      (2,500)        273          49
       Other expense,
         net               (39,967)     14,493     (67,231)      5,209

   Income from continuing
    operations before
    income taxes             7,436      42,194      16,884      61,338
   Income tax expense        2,143      14,759       5,457      21,133
    Income from
      continuing
      operations             5,293      27,435      11,427      40,205
   Loss from discontinued
    operations, net
    of income taxes         (5,182)       (244)     (5,386)       (634)
       Net income         $    111    $ 27,191    $  6,041    $ 39,571

   Basic earnings per share
    Income from continuing
     operations            $  0.08      $ 0.44     $  0.18     $  0.64
    Loss from discontinued
     operations              (0.08)      (0.01)      (0.08)      (0.01)
    Net income             $  0.00      $ 0.43     $  0.10     $  0.63

   Diluted earnings per share
    Income from continuing
     operations            $  0.08      $ 0.39     $  0.18     $  0.58
    Loss from discontinued
     operations              (0.08)         --       (0.08)      (0.01)
    Net income             $  0.00      $ 0.39     $  0.10     $  0.57

   Weighted average
    common shares
    outstanding
     Basic              62,682,783  62,638,926  62,625,378  62,911,082
     Diluted            62,892,868  71,603,784  62,853,659  71,895,185


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

                                          June 30,        December 31,
                                            2008              2007
   Assets
     Cash                               $   148,835       $   114,243
     Trading securities, at
      fair value
       Auction rate                         254,745                --
       Other investment grade                 1,183            34,876
       Subordinates and residuals             4,860             7,362
     Loans held for resale, at
      lower of cost or market                59,563            75,240
     Advances                               261,955           292,887
     Match funded advances                1,096,241         1,126,097
     Mortgage servicing rights              163,743           197,295
     Receivables                             70,712            79,394
     Deferred tax assets, net               177,757           178,178
     Intangibles, including
      goodwill of $15,255 and
      $17,615                                52,905            58,301
     Premises and equipment, net             32,562            35,572
     Investment in unconsolidated
      entities                               59,814            76,465
     Other assets                           101,333           118,786
       Total assets                     $ 2,486,208       $ 2,394,696

   Liabilities and Stockholders' Equity
    Liabilities
       Match funded liabilities         $   993,627       $ 1,001,403
       Lines of credit and other
        secured borrowings                  305,578           339,976
       Investment line                      229,774                --
       Servicer liabilities                 122,988           204,484
       Debt securities                      135,734           150,279
       Other liabilities                    101,668           110,429
          Total liabilities               1,889,369         1,806,571

    Minority interest in
     subsidiaries                             2,272             1,979

    Stockholders' Equity
     Common stock, $.01 par value;
      200,000,000 shares authorized;
      62,715,166 and 62,527,360
      shares issued and outstanding at
      June 30, 2008 and December
      31, 2007, respectively                    627               625
     Additional paid-in capital             179,090           177,407
     Retained earnings                      412,863           406,822
     Accumulated other comprehensive
      income, net of taxes                    1,987             1,292
        Total stockholders' equity          594,567           586,146
          Total liabilities and
           stockholders' equity         $ 2,486,208       $ 2,394,696

CONTACT:  Ocwen Financial Corporation
          David J. Gunter, Executive Vice President, 
           Chief Financial Officer, and Interim Chief Accounting Officer
          (561) 682-8367
          david.gunter@ocwen.com