Ocwen Loan Modification
Ocwen Financial, the mortgage servicing firm under regulatory scrutiny, disclosed on Tuesday that it planned to sell loan servicing rights for $25 billion in loans to another firm, Nationstar Mortgage.
The announcement follows a statement on Monday by the mortgage servicer that it faces potential delisting
from the New York Stock Exchange. The reason, according to a separate
statement, is that it has not filed its annual report to shareholders on
time.
Ocwen
said in its statement that it was continuing to examine whether its
Home Loan Servicing Solutions business can “meet its obligations to fund
new servicing advances.” Though it did not disclose what that meant,
Ocwen cautioned that the situation could have a material negative impact
on its finances.
Shares in Ocwen were down more than 3 percent in early trading on Tuesday, at $8.50.
In selling off the rights to service 142,000 mortgages, which are owned by Fannie Mae and Freddie Mac,
Ocwen is continuing to scale back its business as it faces intense
regulatory scrutiny. The firm has already paid a fine after New York
State’s Department of Financial Services accused it of improper
practices, and its chairman agreed to step down.
The firm is still under pressure from a California regulator, which pushed this year to suspend its license to operate in that state for 12 months.
The
transaction on Tuesday involving servicing rights isn’t the first that
Ocwen has announced so far this year. The firm previously sold nearly
$10 billion in rights to Nationstar last month, $9.6 billion to Green
Tree Loan Servicing and a reported $45 billion to JPMorgan Chase.
Ocwen’s
chief executive, Ronald M. Faris, has said that the company intends to
eventually get out of the business of servicing loans held by Fannie Mae
and Freddie Mac.
