During the conference call and on the charts for the conference call, Altisource reconfirmed their intent to spin-out certain parts of their business.
Regarding, the business to own and rent, individual houses, I prefer that they spin that part out and would consider selling shares I would get in the distribution, because sitting in Europe I just can not relate to whether there is actually a demand for renting single houses. They are in the process of preparing the paperwork for the SEC on this one. Based on an analyst question this could all be finalized by end of 2012, latest early 2013. They plan to invest about 50 million into this in 2012, buying 500 houses of average cost 100,000. Now I image, their will be some cost associated with that, plus cost to set-up the company and spin-in out.... But I have no idea how much, and whether this will impact the P&L of the remaining part of Altisource.
Regarding the later planned sale of their website to sell REO homes, I'm a bit disappointed, because I felt that this was a nice diversification of income for the company. Up to now they only used the website to sell REO homes that were part of the OCWEN portfolio of mortgages that they serviced, selling 7273 REO during the quarter and making 14.8 million in service revenue with a 70% margin, more than doubling revenue vs 2q11. Now they intend to open up the website to sell REO properties from other mortgage services, which should bring a nice growth to this business, and even better later extend the website to regular house sales. So quite frankly I'm a bit disappointed that they want to spin this out as a separate company, because I considered it a nice diversification.