Greetings, and welcome to Ocwen Financial Corporation Preliminary First Quarter Earnings and Business Update Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Mr. Dico Akseraylian. Thank you, Sir. You may begin.

Good morning, and thank you for joining us for Ocwen's Preliminary First quarter 2021 Earnings and Business update call. Please note that our preliminary first quarter 2021 earnings release and slide presentation are available on our website. Speaking on the call will be Ocwen's Chief Executive Officer, Glen Messina; and Chief Financial Officer, June Campbell. As a reminder, the presentation or 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 the future period or by use of forward-looking terminology and adjust matters that are, to different degrees, uncertain. You should bear this uncertainty in mind when considering such statements and should not place undue reliance on such statements. Forward-looking statements involve assumptions, risks and uncertainties, including the risks and uncertainties described in our SEC filings, including our Form 10-K for the year ended December 31, 2020, in our current and quarterly reports since such date. In the past, actual results have differed materially 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 adjusted pretax income and adjusted expenses, among others. We believe these non-GAAP financial measures provide a useful supplement to discussions and analysis of our financial condition and 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. The reconciliation of the non-GAAP measures used in this presentation to their most directly comparable GAAP measures may be found in the press release in the appendix of the investor presentation available on our website. Finally, this presentation and our comments refer to our preliminary first quarter financial results. These statements are based on currently available information and reflect our current estimates and assessments. The company has not finished its first quarter financial closing procedures. There can be no assurance that actual results will not differ from our current estimates and assessments, including as a result of first quarter financial closing procedures and any such differences could be material. The company expects to release final first quarter 2021 results in early May. Now I will turn the call over to Glen Messina.

Thanks, Dico. Good morning, everyone. Thanks for joining the call today. Let's get started on Page 3. Look, we're off to a terrific start. It's been a really busy first quarter. I'm really proud of the team for the results they've delivered. We reported our GAAP net income per share of $0.98 and positive adjusted pretax income. June will take us through our first quarter financial results in a moment. We delivered really strong originations growth, $14 billion in total servicing additions for the quarter, plus we executed bulk purchase letters of intent for roughly $68 billion in MSR UPB. Given our progress in the first quarter, we're increasing our target for total servicing additions to -- up to $150 billion and that obviously includes MAV as well. Our first quarter servicing additions and our Bulk LOIs total over 50% of our revised target. So again, we're off to a really good start. We're excited about our transactions. We announced with Texas Capital Bank. They'll help us accelerate our growth trajectory and provide about 25% of the targeted servicing UPB for MAV. With the bulk servicing portion of that transaction. Regarding MAV, we received all state approvals necessary to close as well as approval from Freddie Mac. We're targeting to commence funding of servicing in MAV in the second quarter and accelerating that growth into the third quarter. We closed the first tranche of the Oaktree Notes also in the first quarter and executed the refinancing of our corporate debt. 100% of our corporate debt is now due after 2025, we believe this significantly derisks the balance sheet. As discussed last quarter, with these actions complete, we are targeting incremental MSR financing of slightly over $500 million to support our growth. And based on our conversations to date, we do…

Thank you, Glen. Please turn to Slide 13. We reported $9 million of net income in the first quarter. This is our 6th consecutive quarter of positive adjusted pretax income. The revenue increase was due to higher servicing fees on $14 billion or 16% higher average UPB service and gain on sale in our higher-margin direct-to-consumer channel, which I'll cover on the next page. MSR valuation adjustment increase was driven primarily by gains on opportunistic bulk purchases in the last quarter that did not repeat this quarter. Operating expense was primarily impacted by maintaining capacity for both the new bulk volume boarding and during foreclosure moratorium and expectation of borrower need. Adjusted pretax income is $7 million, $9 million lower than prior quarter as higher MSR valuation adjustments and higher operating expenses offset higher revenue. Q1 notables include $21 million of favorable net MSR valuation assumption updates due to 74 basis point increase in the blended rates. This was offset in part by costs associated with our corporate debt refinancing. Equity increased to $440 million from $9 million in GAAP net income and $16 million issuance of common stock warrants. Book value per share increased to $51. Please turn to Slide 14. On the left side of the slide, you can see that our total volume was down $1.2 billion, excluding the nonrecurring $15 billion in bulk purchase in Q4. Volume increases in direct-to-consumer and correspondent channels were offset by reduced purchase volume through EDC agency cash window and flow channels. As Glen mentioned, we're focused on balancing volume and pretax income across all of our origination channels, as a result, we chose to limit our volume in our Co-issue channels. A mix shift to the higher-margin direct-to-consumer channel from third-party originated channels, drove the increase in weighted average margin…

Thanks, June. Let's turn to Slide 19. Again, really proud of the team, great results here for the first quarter. We're executing the straightforward objectives of growth, cost leadership and operational excellence to drive improve value for our shareholders. Our alliance with Oaktree is providing capital for growth and revenue diversification. We've derisked our balance sheet by extending our debt maturities, allowing us to access the necessary asset-based financing at lower cost to support our growth objectives. Our originations business is delivering solid progress against our objectives. We've increased our target for total servicing additions to up to $150 billion, including MAV, and roughly 50% of that is either funded to date or under LOI. Servicing is delivering strong operating performance as compared to independent benchmarks, and we're executing a robust and comprehensive technology plan to further improve our performance and competitive position. Our diverse capabilities in origination and servicing, we believe, align well with market opportunities, and we're expanding our products and services to serve a larger portion of our target markets. Based on our executions in the first quarter, industry forecast and assuming successful execution of our plan toward the balance of the year, we believe we are on track to achieve our profitability goals for 2021. I'd like to thank the entire Ocwen Global Business team and our Board of Directors for their hard work and commitment to our success and everything they've done, thus far, to position our business for success. Latanya, with that, let's open up the call for questions.

[Operator Instructions] At this time, I would like to turn the call back over to Mr. Glen Messina for closing comments.

Thank you, Latanya. So shareholders and constituents who joined the call, thank you, for your support and confidence in management's execution. Again, we're executing well and against our objectives. And look forward to talking to you on our next business update call. Thank you very much.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. And thank you for your participation. And have a great day.