Thank you for standing by. This is the conference operator. Welcome to the Ocwen Financial First Quarter 2019 Earnings Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Hugo Arias, Managing Director, Investor Relations and Treasury. Please go ahead, sir.

Good morning, and thank you for joining us for Ocwen's first quarter 2019 earnings call. Please note that our first quarter 2019 earnings release and slide presentation have been released and are available on our Web site for your review. Speaking on the call today will be Ocwen's Chief Executive Officer, Glen Messina; and Chief Accounting Officer, June Campbell. As a reminder, the presentation and our comments today may contain forward-looking statements made pursuant to the Safe Harbor Provisions of the Federal Securities laws. These forward-looking statements may be identified by reference to a future period or by use of forward-looking terminology. 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. You should bear these factors in mind when considering such statements and should not place undue reliance on such statements. Forward-looking statements involve several 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. Our forward-looking statements speak only as of the date they are made. And we disclaim any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In addition, the presentation and our comments contain references to non-GAAP financial measures such as expenses excluding MSR valuation adjustments and notables, income statement notables, available liquidity, and an alternative view of the impact of our NRZ transactions, among others. We believe these non-GAAP financial measures provide a useful supplement to discussions and analysis of our financial condition. We also believe these non-GAAP financial measures provide an alternate way to view certain aspects of our business that is instructive. Non-GAAP financial measures should be viewed in addition to, and not as, an alternative for the company's reported results under accounting principles generally accepted in the United States. For an elaboration of these factors I just discussed, please refer to our presentation and today's earnings release as well as the company's filings with the Securities and Exchange Commission, including Ocwen's 2018 Form 10-K, and once filed its 2019 Form 10-Q. Now, I will turn the call over to Glen Messina.

Thank you, Hugo. Good morning and thank you for joining us. Today, I'll provide an update regarding our progress in executing our key business initiatives and how we are repositioning Ocwen to deliver growth and value creation for our shareholders. Our CFO, June Campbell, will follow with a review of the first quarter 2019 financial results. I will then close the call with some brief remarks before opening it up for questions. Now, please turn to slide four. We remain focused on executing our key business initiatives and positioning the company for profitability in the shortest timeframe possible, while executing the integration of PHH in a prudent and disciplined manner. We have taken decisive action to achieve the objectives of our key initiatives that I am excited by the progress we are making. Since our last earnings call, we have realized several significant achievements. We have closed or been awarded additional MSRs with current UPB of approximately $26 billion, which brings our total volume since reentering the bulk MSR acquisition market to $31 billion. We upsized our senior secured term loan by $120 million to supplement our liquidity in anticipation of $98 million in PHH Corporation bonds maturing in September. We expect to close $300 million of committed MSR financing in the second quarter subject to standard closing and documentation conditions for transactions of this type. We have successfully boarded approximately $390,000 additional loans onto Black Knight MSP, bringing the percentage of loans transferred for RealServicing to approximately 61% from 23% at the end of February. We remain on track to complete the system conversion in the second quarter. We continue to execute against our cost reengineering plan, and have realized annualized adjusted expense savings of $139 million for the first quarter as compared to our annualized second quarter 2018…

Thank you, Glen. My comments today will focus on our first quarter results as compared to the prior quarter. As previously noted, our first quarter investor presentation includes more details on our results and is available on our Web site. Please turn to slide 11, first quarter 2019 reported net loss of $44 million compares unfavorably to net loss of $2 million in the fourth quarter of 2018. Our first quarter was impacted by $22 million of severance, retention and other reengineering costs and $14 million of unfavorable net fair value changes driven by changes in interest rates and valuation assumptions. This was offset by a $31 million recovery of announced previously expense from the service provider. As a reminder our fourth quarter results included the $64 million bargain purchase gains recognized in connection with the PHH acquisition. The positive pre-tax earnings impact from the amortization of the lump sum cash payments received from NRG in 2017 and 2018 was $16 million in the first quarter and $32 million in the prior quarter. The amortization of these lump sum cash payments will have $120 million positive impact to our pre-tax income over future quarters through April of 2020. Revenue of $304 million decreased by $7 million from the prior quarter, servicing revenue of $259 million decreased $18 million due to portfolio run-off. The pace of MSR purchases is ahead of expectations and is expected to offset this negative revenue trend going forward. Lending revenue of $41 million was flat to the fourth quarter excluding a $12 million favorable fair value change from a financing assumption update attributable to a reverse mortgage portfolio. Glen updated you on our progress related to expenses versus our annualized second quarter 2018 baseline. First quarter non-MSR expenses were lower compared to the prior quarter and…

Thank you, June. Now, please turn to slide 15. We remain focused on executing our key business initiatives and positioning the company for future profitability in the shortest timeframe possible. We've taken decisive action to achieve the objectives of our key initiatives, and I'm excited by the progress we're making. Since our last earnings call, we have realized several significant achievements, including -- we have closed or been awarded additional MSRs with current UPB of approximately $26 billion, which brings our total since restarting our bulk MSR acquisition initiative to $31 billion as of March 31. The pace of MSR purchases is ahead of our expectations. We upsized our senior secured term loan by $120 million to supplement our liquidity in anticipation of $98 million in PHH corporate bonds maturing in September. We expect to close $300 million of committed MSR financing in the second quarter, subject to standard closing and documentation conditions for transactions of this type. We have successfully boarded approximately 390,000 additional loans onto Black Knight MSP. This brings the percentage of loans transferred from middle servicing to approximately 61% from 23% at the end of February. We continue to execute against our cost reengineering plan, and have realized annualized adjusted expense savings of $139 million for the first quarter as compared to our annualized second quarter 2018 adjusted expense baseline for the combined companies. We estimate that approximately $36 million of these savings were due to volume indifferences. We completed the merger of home and residential into PHH Mortgage and are on track to complete the merger of Ocwen loan servicing into PHH Mortgage by the end of the second quarter. We continue to proactively engage with regulators on a regular and frequent basis and track our progress as it relates to our regulatory commitments. Our…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Bose George with KBW. Please go ahead, sir.

Hey guys, good morning. You've talked in the past about -- after you completed the MSP integrations that you could potentially speak to the New York regulators and keep at 2% cap per de-listed [ph], do you think that's still a possibility now after this is done in the second quarter and the CFPB issue, is that a parallel issue that doesn't need to be addressed in terms of growth of the portfolio?

Good morning, Bose.

Glen…

Addressing the New York matter first, as it relates to New York, we do have to get through the integration of the PHH, of the [technical difficulty] the PHH systems in order to satisfy the requirements. So, once we get through that process [technical difficulty] New York proving that we've achieved the requirements of their conditional approval. As it relates to the CFPB matter, that is a litigation matter, it does not affect our growth in the business. So, there are no restrictions imposed from a growth perspective as it relates to that litigation.

Okay, great. That's helpful. And then, the $263 million of cash you have, is that fully available for deployment or is there anything else that -- other uses we should think about?

That's fully available for deployment as for the needs for investment and operating purposes.

Okay, great. Thank you.

[Operator Instructions] This concludes the question-and-answer session. I would like to turn the conference back over to Glen Messina for any closing remarks.

Thank you, everyone, for joining the call today. We look forward to providing an update on our progress in our business on our next earnings call.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.