Altisource Portfolio Solutions Stock

Altisource Portfolio Solutions S.A. (Altisource) operates as an integrated service provider and marketplace for the real estate and mortgage industries.

Segments

Servicer and Real Estate segment

This segment provides loan servicers and real estate investors with solutions and technologies that span the mortgage and real estate lifecycle. Within the Servicer and Real Estate segment, the company provides:

Solutions

The company’s Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.

Marketplace

The company’s Marketplace business includes the Hubzu online real estate auction platform and real estate auction, real estate brokerage and asset management services.

Technology and software-as-a-service (‘SaaS’) Products

The company’s Technology and SaaS Products business includes Equator (a SaaS-based technology to manage real estate owned (‘REO’), short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange (a single family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (an automated valuation model and analytics solution).

Origination segment

This segment provides originators with solutions and technologies that span the mortgage origination lifecycle. Within the Origination segment, the company provides:

Solutions

The company’s Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, and loan fulfillment, certification and certification insurance services.

Lenders One

The company’s Lenders One business includes management services provided to the Best Partners Mortgage Cooperative, Inc., doing business as Lenders One (‘Lenders One’), and certain loan manufacturing and capital markets services provided to the members of the Lenders One cooperative.

Technology and SaaS Products

The company’s Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), Lenders One Loan Automation (‘LOLA’) (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI (technology to manage the workflow and automate components of the loan fulfillment, pre and post-close quality control and service transfer processes), ADMS (a document management and data analytics delivery platform), and automated valuation technology.

Customers

The company’s customers include large financial institutions, government-sponsored enterprises (‘GSEs’), banks, asset managers, servicers, investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, correspondent and private money lenders.

Customer Concentration

Ocwen

Ocwen Financial Corporation (together with its subsidiaries, ‘Ocwen’) is a residential mortgage loan servicer of mortgage servicing rights (‘MSRs’) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.

During the year ended December 31, 2022, Ocwen was the company’s largest customer, accounting for 41% of the company’s total revenue. Ocwen purchases certain mortgage services from the company under the terms of services agreements and amendments thereto (collectively, the ‘Ocwen Services Agreements’) with terms extending through August 2030.

Rithm

Rithm Capital Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, ‘Rithm’) is a real estate investment trust that invests in and manages investments primarily related to residential real estate, including MSRs and excess MSRs.

Ocwen has disclosed that Rithm is its largest client. As of December 31, 2022, approximately 17% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (‘UPB’)) were related to Rithm MSRs or rights to MSRs (the ‘Subject MSRs’).

Rithm purchases brokerage services for REO exclusively from the company, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the ‘Brokerage Agreement’) with terms extending through August 2025.

Other

The company’s services are provided to customers predominantly located in the United States.

Sales and Marketing

The company’s sales and marketing team has extensive relationship management and industry experience. These individuals cultivate and maintain relationships throughout the industry sectors the company serves. The company sells its suite of services to mortgage servicers, mortgage originators, GSEs, buyers and sellers of homes for investment use and financial services firms.

The company’s primary sales and marketing focus areas are to:

Expand relationships with existing customers by cross-selling additional services and growing the volume of existing services the company provides. The company’s customer relationships represent meaningful growth opportunities for the company.

Develop new customer relationships by leveraging the company’s comprehensive suite of services, performance and controls. There are meaningful growth opportunities to sell the company’s suite of services to new customers.

Intellectual Property and Data

As of December 31, 2022, the company had been awarded one patent that expires in 2023, one patent that expires in 2024, seven patents that expire in 2025, two patents that expire in 2026, one patent that expires in 2027, two patents that expire in 2029, one patent that expires in 2030 and one patent that expires in 2036. In addition, the company has registered trademarks in a number of jurisdictions, including the United States, the European Union (‘EU’), India and five other jurisdictions. These trademarks generally can be renewed indefinitely, provided they are being used in commerce.

Market

The company sells its suite of services to mortgage servicers, mortgage originators, GSEs, buyers and sellers of homes for investment use and financial services firms.

Government Regulation

The company’s business and the business of the company’s customers are subject to extensive scrutiny and regulation by federal, state and local governmental authorities, including the Federal Trade Commission (‘FTC’), the CFPB, the Securities and Exchange Commission (‘SEC’), the Department of Housing and Urban Development (‘HUD’), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of the company’s auction, real estate brokerage, title insurance agency, appraisal management, valuation, property preservation and inspection, mortgage and debt collection, trustee, mortgage origination underwriter and broker, property and asset management, insurance and credit report reselling services.

The company is also subject to the requirements of the Foreign Corrupt Practices Act (‘FCPA’) and comparable foreign laws due to the company’s activities in foreign jurisdictions.

In addition to federal and state laws regarding privacy and data security, the company is subject to data protection laws in the countries in which the company operates. Additionally, certain of the company’s entities are subject to the EU General Data Protection Regulation (‘GDPR’).

History

Altisource Portfolio Solutions S.A. was incorporated in 1999.