Q4 2019 Earnings Call
And by and welcome to the Altisource fourth quarter and full year 2019 earnings conference call. At this time all participants are in listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance. Please press Star then zero I would now like to have the conference over to your speaker today, Ms., Michelle Esterman Chief Financial Officer. Thank you. Please go ahead.
Thank you operator, we first want to remind you that the earnings release form 10-K in quarterly slides are available on our website at www Dot Altisource Dot com.
Can you provide additional information investors may find useful our remarks today include forward looking statements, which involve a number of risks and uncertainties that could cause actual results to differ. Please review the forward looking statements section and the company's earnings release as well as the risk factors contained in our 2019 form 10-K.
Which describe factors that may lead to different results.
We undertake no obligation to update these statements as a result of new information or future events.
During this call we will present, both GAAP and non-GAAP financial measures in earnings release in quarterly slides you will find additional disclosures regarding the non-GAAP measures a reconciliation of got GAAP to non-GAAP measures is included in the appendix to the quarterly slide.
Joining me for today's call is Bill Shepro, our chairman and Chief Executive Officer, I would now like to turn the call over to Bill.
Good afternoon, and thank you for joining todays call today, I will summarize our 2019 business and financial performance and discuss our current business environment in 2020 objectives.
Altisources continuing on its multiyear strategic plan to address ongoing revenue concentration risks with Ocwen and energy, while driving commercial acceleration of our core largely counter cyclical businesses.
There are some uncertainties surrounding the downstream services, we provide to OCC win on the NRC portfolios based on certain statements Theyve made publicly.
We estimate that these portfolios represent approximately 40% of our 2020 revenue.
Although we don't know what OCC win or NRG will do or win for now this is a cash cow.
60% of our estimated 2020 revenue is from Ocwen NRG and other customers. We have a long term co-operative brokerage agreement with NRG to provide Oreo brokerage and auction services and long term agreements with Ocwen, where we provide services unrelated to nrcs portfolios.
Both of these agreements extend through August 2025, and generate significant revenue at attractive margins.
With respect to our other customers, we anticipate growing revenue by 25% to 35% this year generating $105 million to $115 million of revenue.
We believe we can accomplish this growth despite the very challenging environment, where industry wide delinquencies are at their lowest level on record and more than 14% lower than a year ago.
This growth should accelerate further in a rising delinquency rate environment from our existing customer base expanding market share and industry consolidation.
We view Altisource as a counter cyclical growth company with a legacy cash business.
There are only three to four vendors in each of our business lines competing with the breadth of services and scale that we provide on a nationwide basis.
Given the positioning of our core businesses the strength of our leadership team, our marquee customer base and our robust sales pipeline. We believe altisource will address our revenue concentration issues and emerge as a more diversified and growing company.
Turning to slide three.
During 2019, we continue to reposition altisource, we sold enclosed certain noncore businesses consolidated our sales and marketing resources under a seasons leader.
Establishing innovative product organization and further developed our field services marketplace and mortgage and real estate solutions businesses.
Altisource as a leading provider in each of our core businesses and operates at a breadth and scale that we believe few of our competitors can match.
As you can see on slide four across our three core businesses fourth quarter 2019 service revenue from customers other than Ocwen, NRC and resi grew by 19% compared to the fourth quarter of 2018.
If you were to look back over the last four years.
Excluding equator 2019 revenue in our core businesses from other customers grew by 71% while delinquency rates declined by approximately 40% over the same period.
We exclude equator because of our strategy to leverage it as a tool to win higher margin Hubzu business.
This growth included some of the largest financial institutions in the United States.
Today, Altisources doing business with all the top five servicers and five of the top 10 originators slide five highlight some of our more notable wins in slide six through nine provide you with a more detailed overview of each of our three businesses.
Slide six provides an overview in key highlights of the field services business.
During 2019, we grew revenue in this business from customers other than Ocwen energy in resi by 55% compared to 2018 and by an impressive 229% in the fourth quarter of 2019 compared to the fourth quarter of 2018.
This growth was largely driven by the addition of several leading loan servicers to the field services platform.
We anticipate that the 2019 client onboardings as well as scheduled Q1 in Q2 2020, Onboardings should help physician field services to achieve greater than 70% growth in 2020 from customers other than off when energy in resi.
Slide seven provides an overview and key highlights of the marketplace business.
During 2019, we grew hubzu revenue from customers other than Ocwen, NRG, and revvy by 9% compared to 2018 and by 41% in the fourth quarter of 2019 compared to the fourth quarter of 2018.
This growth was more than offset by lower equator revenue from our equator strategy I just discussed.
As shown on slide eight hubzu as year end foreclosure and Oreo auction inventory from customers other than Ocwen and NRC was 50% higher than year end 2018, and represented 35% of our total inventory.
Given our inventory levels and anticipated market share gains with existing customers timing of Onboarding, new customers and the sales pipeline, we anticipate hubzu revenue growth from customers other than Ocwen and NRC to accelerate in 2020.
As of the end of February Hubzu inventory from other customers was 8% higher than year end.
Slide nine provides an overview and key highlights of the mortgage and real estate solutions business.
During 2019, we grew revenue from customers other than Ocwen energy in resi by 6% compared to 2018 and by 25% in the same quarter of 2019 compared to the fourth quarter in 2018.
The stronger fourth quarter performance was primarily from loan originations growth in the second half of 2019.
A strengthening construction market and the addition of a number of new customers across our offerings.
We continue to develop our origination related capabilities and believe we are well positioned to capture more revenue in this low interest rate environment. While also benefiting from 2019 client onboardings and an attractive sales pipeline.
Our mortgage and real estate solutions business is off to a very strong start in 2020.
With January and February revenue from customers other than Ocwen, and NRC up approximately 38% compared to the same two months in 2019.
As we highlighted on slide 10, we also made progress exiting non core businesses, we sold our financial services business and rental home portfolio shutdown the owners dot com business and created a separate pointilist entity.
We also supported Ocwens migration from real servicing to a new servicing system and began selling Reggie shares.
On February 18th, whereas the announced that Amhurst residential is acquiring resi for $12 in 50 cents per share in cash.
And that the transaction is targeted to close in the second quarter of 2020.
Upon closing, we expect to receive approximately $43.2 million and merger proceeds.
And the remaining $3 million of proceeds due from resin is 2018 acquisition of our rental property management business.
Our divestitures are helping drive greater focus on our core businesses.
Monetizing non core assets and reducing cash burn from earlier stage businesses.
We use proceeds from the sale of businesses and revenue shares to continue to reduce our debt.
As you can see on slide 11 in 2019, we reduced the principal balance of our term loan by $45 million to 294 million.
We ended 2013 with 168 and a half million dollars of net debt less marketable securities.
A 31% reduction for the year.
During 2019, we spent a modest $2 million on capital expenditures, our capital requirements are low and we anticipate that they will remain so in 2020.
For a more detailed description of our fourth quarter and full year financial performance compared to prior periods.
Please refer to todays press release and 10-K.
In reviewing these materials you will note that we recognized $311 million of noncash tax expense.
The majority of which relates to placing a full valuation allowance on our Luxembourg deferred tax assets.
As a result of three years of cumulative losses in Luxembourg, GAAP requires us to fully reserved these assets. The company currently has approximately $1.3 billion of Luxembourg, and our wells that are available to offset future Luxembourg income.
Turning to our 2020 business environment and objectives, we continue to focus on accelerating the growth of our core businesses from customers other than Ocwen an energy.
Reducing costs, maintaining strong liquidity and based upon business and market conditions, reducing debt.
While we don't know what OCC winter NRG will do or when we are preparing for this uncertainty, including exploring our legal options.
We're also working with potential strategic clients to accelerate our growth from customers other than Ocwen and NRG.
Keep in mind that moving servicing and changing downstream service providers typically takes time and requires diligent planning otherwise it can be very disruptive to homeowners and investors.
Today, Altisources or more streamlined company focused on larger opportunities with a strong cash position lower debt and expanding business from customers other than Ocwen and NRC.
We are demonstrating our ability to add new strategic clients, while delinquency rates decline.
And believe we are in a very strong physician to benefit from growing loan originations and a softening economy.
I'd like to conclude by thanking and recognizing Altisources leadership team and employees, who remain incredibly focused on diversifying our customer base and providing high quality services to all of our customers.
Ill now open the call for questions operator.
Thank you as a reminder to ask a question you will need to press Star then one on your touched on telephone to withdraw your question press the pound Keith.
Please standby will be compiled the culinary roster.
Our first question comes from Mike Grondahl with Northland Securities. Your line is now open.
Yes, Hey, Bill and Michelle.
Could you just kind of weak.
You said about.
The percent of 2020 revenues I.
I think related.
And our union year in legal option, you were talking really fast I, just want to make sure I caught that.
Sorry about that Mike Good afternoon, yes. So if you look at our total revenue and what we estimate it's going to be for 2020.
We believe 40% of that revenue is coming from Auckland, but related to MSR is or portfolios owned by NRG.
The other 60%.
Some of that is coming from OCC win on portfolios. It owns.
Some of it coming from NFC under a separate co-operative brokerage agreement and by the way the Acklin agreement in the NRC agreement extends through.
August of 2025, and then the last piece of that is what we have is very fast growing we believe is going to grow very quickly in 2020 business from other customers and I think we said we estimate that could be as much Michelle would I say 100 $515 million that's correct.
And so.
Given the.
The public statements that are Quinn and that our Ziad recently made we thought it made sense.
The carve out let you know roughly what percentage of our revenue.
Comes from OCC went under our long term services agreement, but is related to enter these portfolios and thats the 40%.
In 2020.
Got it may have been communicated anything to you, but there's a little bit in new business out there how long largely going to take some of that business from you is that the thought.
Yes, Michael what we're reacting to is the public statements that both both Ocwen and NRC recently made and what that impact could potentially have on our business. We really are focused.
Clearly, we are going to value whether legal options, we have three years or should that take place because we have long. We believe long term services agreements that cover that revenue, but given there is some uncertainty there we thought it made sense to call it out.
No Thats fair. Thank you.
Hi, I'm looking at how quick.
He is the revenue per home.
In margin.
Would you say, it's pretty similar for sort of.
According to NRG business.
Versus non hock wind energy business.
Kind of in newer stuff you're doing.
So Mike the answer is it depends so for some clients. We have one very large bank client for example, where we're providing.
Oreo auction Oreo brokerage field services work on the Oreo as well as title and the fees earned from that client and this is a top fiber top 10 of bank are the same or better than the fees that were earning on the aquanauts nosy portfolio and then when you're when.
Some of our growth is coming from providing a foreclosure auctions or marketing the foreclosure auction for certain clients.
As a very large you know the one is a GFC and then we're doing work for several other customers to manage both the first in the second chance.
FHLB auctions.
Air the fees are typically as high as a 5%.
But they depending on the client they could be anywhere from let's say, 2% to 5%.
Got it and verify that Michael we're providing fewer services when we're just marketing the auction the foreclosure auction you're not doing as much work as you are doing to market, a foreclosure or an oreo sorry to market in Oreo assets.
So yes that in some cases, the fees may be lower but you're doing less work.
Got it in.
On the gross have been knock wood stuff.
Hundred five to 150 million.
How should we think about the margins on that business kind of versus the legacy business.
Sure. So when you think about.
We have three businesses, where you have the marketplace business and again it depends on the mix of revenue how much is tied the foreclosure and how much is tied to Oreo asset management, but thats generally a very high margin business. When you think about the field services growth in some cases, there we have obligations to provide those services in the us and where.
We have less scale. So initially that's lower margin, but we believe overtime that will get to similar margins that we provide the on the other portfolios, where we can do work from around the world and then in our mortgage and real estate solutions business. That's includes a title trustee valuations granites business.
It was like that we anticipate there in the 20% to 30% the range again, depending on the service.
Got it in two more.
Overall for nine.
Just Kenny track I know Youve shutdown owners dotcom you still have.
I mean, a list when the losses from those two in 19 in roughly what do you think they're going to be in 20.
Give me one second to so Mike I think it was around 20, a little over $20 million in 2019 related to a point list and owners. If you remember with point unless we funded that and don't anticipate providing additional funding to pointless. So we anticipate some point this year before the end of year.
That they'll go out and raise.
Equity and or.
Debt to fund their operation. So we don't anticipate to funding Pointilist any further but we haven't we maintain a larger ownership stake in that company and with respect to owners I think were largely done we don't anticipate any any expenses in 2020.
Got it will in 2020 will owners have any losses that you have to do assume because the viewer over 50% ownership stake or is that.
Getting closer to breakeven.
I think I understand the gen. So one yes, so and I think you midpoint list not owners importantly, aviats does it does run through our income statement, but we won't be we're not planning on fund again.
Any further and we do plan on adding it back when we show our earnings.
Adding back or not it.
By the way Pointlessness, yes.
Go ahead.
We're having some success pointless is having some success attracting very.
Household names as customers that are very excited about the product so.
Demonstrating its it has very low churn of existing customers and as a very aggressive growth plan for this year. So we're we're very optimistic in the long term that pointilist could be very valuable asset for the company, but in the meantime.
We don't have any plans to fund at any further.
Got it in last one for me.
Back in 2017, you had about 60 million of investments.
2018 number that was like 44 million.
What was loss totaled 29.
What kind of the outlook for 2020 that investments you still making I think it's getting pretty low right I, just kind of want to give an update.
Yes, thats roughly about $20 million, we just talked about Mike and we don't anticipate outside of a couple of million dollars a capital we're spending this coming year.
As you know, we we expense all of our the vast majority of our technology development.
So we don't anticipate to any.
Real investment and these other businesses after adding back the point the pointless.
Okay, Hey, thanks, a lot.
Thank you and as a reminder to ask a question you will need to press Star then one on you touched on telephone to withdraw your question press the pound key December five only compiled further culinary roster.
And sneakers I'm showing no further questions in the queue at this time I'd like to turn the call back to Bill Shepro for any closing remarks.
Thank you operator, and thank you for attending today's call. We look forward to talking to you assume ticket.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude your programming you may now disconnect.
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Ladies and gentlemen, thank you for standing by and welcome to the Altisource fourth quarter and full year 2019 earnings conference call.
This time all participants are in listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you're acquiring any further assistance. Please press star then zero.
I like to handle the conference over to your speaker today, Ms., Michelle Esterman Chief Financial Officer. Thank you. Please go ahead.
Thank you operator, we first want to remind you that the earnings release form 10-K in quarterly slides are available on our website at www Dot Altisource Dot com.
Ill provide additional information investors may find useful.
Our remarks today include forward looking statements, which involve a number of risks and uncertainties that could cause actual results could differ. Please review the forward looking statement section and the company's earnings release as well as the risk factors contained in our 2019 form 10-K, which describes factors that may lead to different result.
We undertake no obligation to update these statements as a result of new information or future events.
During this call will present, both GAAP and non-GAAP financial measures and earnings release in quarterly Slide you will find additional disclosures regarding the non-GAAP measures a reconciliation of GAAP GAAP to non-GAAP measures is included in the appendix to the quarterly slide.
Joining me for today's call is Bill Shepro, our chairman and Chief Executive Officer, I would now like to turn the call over to Bill.
Good afternoon, and thank you for joining todays call.
Today, I will summarize our 2019 business and financial performance and discuss our current business environment and 2020 objectives.
Altisources continuing on its multiyear strategic plan to address ongoing revenue concentration risks with Ocwen and NRC, well driving commercial acceleration of our core largely counter cyclical businesses.
There are some uncertainties surrounding the downstream services, we provide the OCC when on the NRC portfolios based on certain statements they've made publicly.
We estimate that these portfolios represent approximately 40% of our 2020 revenue.
Although we don't know what OCC, when or NRG will do or win for now this is a cash cow.
60% of our estimated 2020 revenue is from Hock when energy and other customers. We have a long term co-operative brokerage agreement with NRC to provide Oreo brokerage and auction services and long term agreements with Ocwen, where we provide services unrelated to nrcs portfolios.
Both of these agreements extend through August 2025, and generate significant revenue at attractive margins.
With respect to our other customers, we anticipate growing revenue by 25% to 35% this year generating $105 million to $115 million of revenue.
We believe we can accomplish this growth despite the very challenging environment, where industry wide delinquencies are at their lowest level on record and more than 14% lower than a year ago.
This growth should accelerate further in a rising delinquency rate environment from our existing customer base expanding market share and industry consolidation.
We view Altisource as a counter cyclical growth company with a legacy cash business. There are only three to four vendors in each of our business lines competing with the breadth of services and scale that we provided on a nation wide basis.
Given the positioning of our core businesses the strength of our leadership team, our marquee customer base and our robust sales pipeline. We believe altisource will address our revenue concentration issues and emerge as a more diversified and growing company.
Turning to slide three.
During 2019, we continue to reposition Altisource, we sold in close certain noncore businesses consolidated our sales and marketing resources under a season leader.
Establish an innovative product organization and further develop our field services marketplace and mortgage and real estate solutions businesses.
Altisource as a leading provider in each of our core businesses and operates at a breadth and scale that we believe few of our competitors can match.
As you can see on slide four across our three core businesses fourth quarter 2019 service revenue from customers other than Ocwen, NRG and Revvy grew by 19% compared to the fourth quarter of 2016.
If you were to look back over the last four years, excluding equator 2019 revenue in our core businesses from other customers grew by 71% while delinquency rates declined by approximately 40% over the same period.
We exclude equator because of our strategy to leverage it as a tool to win higher margin Hubzu business.
This growth included some of the largest financial institutions in the United States.
Today Altisource is doing business with all the top five servicers and five of a top 10 originators slide five highlight some of our more notable wins and slide six through nine provide you with a more detailed overview of each of our three businesses.
Slide six provides an overview and key highlights of the field services business.
During 2019, we grew revenue in this business from customers other than Ocwen energy in resi by 55% compared to 2018 and by an impressive 229% in the fourth quarter of 2019 compared to the fourth quarter 2018.
This growth was largely driven by the addition of several leading loan servicers to the field services platform.
We anticipate that the 2019 client Onboardings as was scheduled Q1 in Q2 2020, Onboardings should help position field services to achieve greater than 70% growth in 2020 from customers have enough when energy in resi.
Slide seven provides an overview and key highlights of the marketplace business.
During 2019, we grew hubzu revenue from customers suburban Ocwen NRG in Revvy by 9% compared to 2018 and by 41% in the fourth quarter of 2019 compared to the fourth quarter of 2018.
This growth was more than offset by lower equator revenue from our greater strategy I just discussed.
As shown on slide eight hubzu as year end, foreclosure and Oreo auction inventory from customers rather than an awkward and NRC was 50% higher than year end 2018, and represented 35% of our total inventory.
Given our inventory levels and anticipated market share gains with existing customers timing of Onboarding, new customers and the sales pipeline, we anticipated hubzu revenue growth from customers other than Ocwen and NRC to accelerate in 2020.
As of the end of February Hubzu inventory from other customers was 8% higher than year end.
Slide nine provides an overview and key highlights of the mortgage and real estate solutions business.
During 2019, we grew revenue from customers other than Ocwen energy in resi by 6% compared to 2018 and by 25% in the same quarter of 2019 compared to the fourth quarter in 2018.
A stronger fourth quarter performance was primarily from loan originations growth in the second half of 2019.
Strengthening construction market and the addition of a number of new customers across our offerings.
We continue to develop our origination related capabilities and believe we are well positioned to capture more revenue in this low interest rate environment. While also benefiting from 2019 client onboarding and an attractive sales pipeline.
Our mortgage and real estate solutions business is off to a very strong start in 2020.
In January and February revenue from customers other than Ocwen, and NRG up approximately 38% compared to the same two months in 2019.
As we highlighted on slide 10, we also made progress exiting non core businesses.
We sold our financial services business and rental home portfolio shutdown, the owners dot com business and created a separate pointless entity.
We also supported Ocwens migration from Realservicing to a new servicing system have began selling revenue shares.
On February 18, whereas you announced the Amhurst residential is acquiring revvy for $12.50 per share in cash.
And that the transaction is targeted to close in the second quarter of 2020.
Upon closing, we expect to receive approximately $43.2 million and merger proceeds.
And the remaining $3 million of proceeds due from revenues 2018 acquisition of our rental property management business.
Our divestitures are helping drive greater focus on our core businesses.
Monetizing non core assets and reducing cash burn from earlier stage businesses.
We use proceeds from the sale of businesses and revenue shares to continue to reduce our debt.
As you can see on slide 11 in 2019, we reduced the principal balance of our term loan by $45 million to $294 million.
We ended 2017 with 168 and a half million dollars of net debt less marketable securities.
A 31% reduction for the year.
During 2019, we spent a modest $2 million on capital expenditures, our capital requirements are low and we anticipate that they will remain so in 2020.
For a more detailed description of our fourth quarter and full year financial performance compared to prior periods.
Please refer to todays press release and 10-K.
In reviewing these materials you will note that we recognized $311 million of noncash tax expense.
The majority of which relates to placing a full valuation allowance on our Luxembourg deferred tax assets.
As a result of three years of cumulative losses in Luxembourg, GAAP requires us to fully reserved these assets. The company currently has approximately $1.3 billion of Luxembourg, Anna wells that are available to offset future Luxembourg income.
Turning to our 2020 business environment and objectives, we continue to focus on accelerating the growth of our core businesses from customers other than Ocwen and an RV.
Reducing costs, maintaining strong liquidity and based upon business and market conditions, reducing debt.
While we don't know what OCC winter NRG will do or when we are preparing for this uncertainty, including exploring our legal options.
We're also working with potential strategic clients to accelerate our growth from customers other than Ocwen and NRG.
Keep in mind that moving servicing and changing downstream service providers typically takes time and requires diligent planting otherwise it can be very disruptive to homeowners and investors.
Today, Altisources or more streamlined company focused on larger opportunities with a strong cash position lower debt and expanding business from customers other than Ocwen and NRC.
We are demonstrating our ability to add new strategic clients, while delinquency rates decline.
And believe we are in a very strong position to benefit from growing loan originations and a softening economy.
I'd like to conclude by thanking and recognizing Altisources leadership team and employees, who remain incredibly focused on diversifying our customer base and providing high quality services to all of our customers.
Ill now open the call for questions operator.
Thank you as a reminder to ask a question you will need to press Star then one on your touched on telephone to withdraw your question press the pound Keith.
Please standby will be compiled accumulate roster.
Our first question comes from Micron dealt with Northland Securities. Your line is now Ben.
Yes, Hey, Bill and Michelle.
Bill could you just kind of we keep what you said about 40% of 2020 revenues.
I think related and R&D in the uncertainty there and legal options you were talking really fast I just want to make sure I caught that.
Sorry about that Mike Good afternoon, yes. So if you look at our total revenue and what we estimate it's going to be for 2020.
We believe 40% of that revenue is coming from off when but related to MSR is our portfolios are owned by NRG.
The other 60%.
Some of that is coming from back when on portfolios. It owns.
Some of it's coming from NFC under a separate co-operative brokerage agreement and by the way the Ocwen agreement and the NRC agreement extends through.
August of 2025, and then the last piece of that is what we have is very fast growing we believe is going to grow very quickly in 2020 business from other customers and I think we said we estimate that could be as much Michelle would I say 100 $515 million that's correct.
And so.
Given the.
The public statements that Ocwen and that our ZF recently made we thought it made sense.
The carve out let you know roughly what percentage of our revenue.
Comes from Iraq went under our long term services agreement, but as it related to Nrcs portfolios and Thats the 40%.
In 2020.
Got it may have been communicated anything to you, but there's a little bit of nervousness out there how long or are they going to take some of that business from deal is that the thought.
Yes, Michael what we're reacting to is the public statements that both both acquainted NRC recently made and what that impact could potentially have on our business.
We really are focused.
Mike clearly, we're going to value what legal options. We have showed that take place because we have long we believe long term services agreements that cover that revenue.
Given there is some uncertainty there we thought it made sense to.
Paul It out.
No Thats fair. Thank you.
Hi, I'm looking at Hubzu quick.
Is the revenue will hold.
In margin.
Did you say, it's pretty similar for sort of.
According to NRG business.
Non ocwen NRG business.
And then yes, you were stuff you're doing.
So Mike the answer is it depends so for some clients. We have one very large bank client for example, where we're providing.
Oreo auction Oreo brokerage field services work on the Oreo as well as title and the fees earned from that client and it's a top five or top 10.
Bank.
Are the same or better than the fees that were earning on the aquanauts nosy portfolio and then when you're when some of our growth is coming from providing a foreclosure auctions or marketing the foreclosure auction for certain clients.
As a very large one is a GSV and then we're doing work for several other customers to manage both the first in the second chance.
FHLB auctions.
Air the fees are typically as high as five percents.
But they depending on the client they could be anywhere from let's say, 2% to 5%.
Got it and verify that hey, Michael we're providing fewer services when we're just marketing the auction the foreclosure auction you're not doing as much work as you are doing to market, a foreclosure or an area sorry, good market in Oreo assets.
And so yes that in some cases, the fees may be lower but you're doing less work.
Got it in.
On the growth of the non Ocwen stuff, the 105 to 115 million.
How should we think about the margins on that business kind of versus the legacy business.
Sure so that when you think about.
We have three businesses right the marketplace business and again it depends on the mix of revenue how much is tied the foreclosure and how much is tied to Oreo asset management, but that's generally a very high margin business. When you think about the field services growth in some cases, there we have obligations to provide those services in the us and where.
We have less scale. So initially that's lower margin, but we believe overtime that will get to similar margins that we provide the on the other portfolios, where we can do work from around the world and then in our mortgage and real estate solutions business that includes a title trustee valuations granites business.
It was like that we anticipate there in the 20% to 30% the range again, depending on the service.
Got it in two more.
Overall for 19, just kind of track I know youve shutdown owners dotcom you still have.
In a list.
Losses from those two in 19 in roughly what do you think they're going to be in 20.
Give me one second.
So Mike I think it was around 20, a little over $20 million in 2019 related to a point of less than owners. If you remember with point unless we funded that and don't anticipate providing additional funding to pointless. So we anticipate some point this year before the end of year that they'll go out and raised.
Equity under.
Debt to fund their operation. So we don't anticipate to funding point less than a further but we haven't we maintain a larger ownership stake in that company and with respect to owners I think were largely done we don't anticipate any any expenses in 2020.
Got it it will in 2020 will orders have any losses that you ask you assume because of your over 50% ownership stake or is that.
Getting closer to breakeven.
If I understand that Jeff. So one yes, so and I think you midpoint analysts not owners endpoint allowed the asset that's it does run through our income statement, but we won't be we're not planning on funding it.
Any further and we do plan on adding it back when we show our earnings.
Adding back at it.
By the way pointless to you.
Go ahead.
We're having some since that point always says having some success attracting very.
Household names as customers that are very excited about the product.
Demonstrating its it has very low churn of existing customers and as a very aggressive growth plan for this year. So we're very optimistic in the long term the pointilist could be a very valuable asset for the company, but in the meantime.
We don't have any plans to fund at any further.
Got it and last one from me.
Back in 2017, you had about 60 million of investments.
2018 number that was like 44 million.
What was the lowest total for 2019, what's kind of the outlook for 2020 that investments you are still making I think it's getting pretty low, but I just kind of wanted to get an update.
Yes, thats roughly about $20 million, we just talked about Mike and we don't anticipate outside of a couple of million dollars. Our capital we're spending this coming year.
As you know, we we expense all of our vast majority of our technology development.
So we don't anticipate.
Any real investment and these other businesses.
After adding back the point the point list.
Okay, Hey, thanks, a lot.
Thank you and as a reminder to ask a question you will need to press Star then one on your touched on telephone to withdraw your question press the pound key the somebody will be compiled is further culinary roster.
And speakers I'm showing no further questions in the queue at this time I'd like to turn the call back to Bill Shepro for any closing remarks. Thank you operator and thank you for attending today's call. We look forward to talking to you assume pickup.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude your programming you may all disconnect.