Ocwen sets aside $100M to end legal troubles : Loan Modification Key

Ocwen sets aside $100M to end legal troubles

Ocwen sets aside $100M to end legal troubles

"Ben Lawsky appears to be ready to make quick work of mortgage-servicer Ocwen Financial.

The head of the New York Department of Financial Services could settle with the embattled Atlanta company before the end of the year — as negotiations over penalties for conflicts of interest and misdated loan modification letters are beginning to take shape, two sources familiar with the talks told The Post.

Lawsky first made his concerns public about Ocwen this past winter.

Ocwen, which is controlled by billionaire real estate mogul William Erbey, announced on Thursday that it had set aside $100 million for a settlement with Lawsky’s DFS, though the final settlement figure could be higher.

“We believe it is unlikely we will reach a settlement for anything less than $100 million,” Erbey said during an earnings call.

The pace of the negotiations is “the best kept secret on Wall Street,” said Henry Coffey, an analyst at Sterne Agee & Leach.

On Oct. 21, nine months after Lawsky cited conflict among several Erbey-controlled companies — each connected to the mortgage business — the DFS claimed that Ocwen had sent back-dated letters to homeowners about opportunities to modify their mortgages.

Because Ocwen back-dated the letters, the deadline for the opportunity had passed.

Ocwen has apologized to its customers for the “inadvertently misdated” letters and has said it would hire an independent investigator to look into the matter.

Ocwen was aware of the DFS inquiry into the letter-dating by the end of the quarter, when it would have come up with the $100 million settlement figure, one person said.

The terms of the settlement are only starting to get hammered out, but are likely to include compensation for wronged homeowners and a change in leadership, the two people said.

The DFS hasn’t ruled out replacing C-suite executives, including even Erbey himself, one person said.

Lawsky’s office declined to comment on any aspect of any possible settlement.

Erbey, Ocwen’s chairman, said during the Thursday call that negotiations include “non-monetary elements.”

“They’re trying to break past the corporate vale of fines and penalties and corrective action and cause some physical pain,” Coffey said.

Ocwen on Thursday announced a loss of $75 million, or 58 cents a share, for the third quarter, largely on reserves to settle with the DFS.

It earned $60.6 million, or 39 cents, a year ago.

Revenues in the period fell 3 percent, to $513.7 billion.

With the approximate size of a settlement in view, investors bid up Ocwen shares. While regulators have cracked down on the company, Wall Street sent the stock up 11.3 percent, to $23.16."

 

Read more here

No Comments Yet.

Leave a reply

IMPORTANT: The text in this website and product(s) sold on this website do not substitute for legal advice. Nor does the text substitute for real estate, financial, tax, bankruptcy or other professional advice. Loan Modification Key® and its owner(s) cannot and do not guarantee results from any lender or servicer. Loan Modification Key® and its owner(s) do not represent any loan modification program or governmental program. Loan Modification Key® and its owner(s) do not represent any government agency. The text herein represents information, opinion and expertise gathered in the last several years' experience in the mortgage industry. Loan Modification Key® is a non-profit 501 (c)(3) tax-exempt organization.
Sign in
classic
Forgot password?
×
Sign up

(*) Required fields

I agree with OptimaSales Terms & Privacy Policy

×