amended reply to ocwen filed 12-26-14
TRANSCRIPT
8/10/2019 Amended Reply to Ocwen Filed 12-26-14
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12/24/2014 Ocwen Shares Fall 16% in Morning Trade - WSJ
http://www.wsj.com/articles/ocwen-shares-fall-16-in-morning-trade-1419348692
Shares of embattled mortgage-servicing firm Ocwen Financial Corp. fell sharply again
Tuesday after the company outlined changes to its business strategy in the wake of a
$150 million settlement with New York’s top financial regulator.
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customervisit http://www.djreprin ts.com.
http://www.wsj.com/articles/ocwen-shares-fall-16-in-morning-trade-1419348692
MARKETS
O c w e n S h a r e s F a l l f o r S e c o n d D a y
Mortgage-Servicing Firm Outlines Strategy Changes After Settlement With Regulator
Ocwen CEO Ronald Faris, pictured in 2009, said Monday the company would withdraw from the bus iness of servicing
mortgages backed by the U.S. government.REUTERS
Dec. 23, 2014 10:31 a.m. ET
By JAMES STERNGOLD And ALAN ZIBEL
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12/24/2014 Ocwen Shares Fall 16% in Morning Trade - WSJ
http://www.wsj.com/articles/ocwen-shares-fall-16-in-morning-trade-1419348692
The company’s stock fell $2.51, or 16%, to $13.50 in morning trading after falling below
$13 at one point. Analysts at Sterne Agee said Tuesday morning that the mortgage
servicer’s share price is likely to stabilize around $11.50 to $13 per share, and sliced its
price target to $14.
In a phone
call withanalysts on
Monday
afternoon,
Ocwen CEO
Ronald
Faris said
the
company will
withdraw
from the
business of
servicing
mortgages
backed by
theU.S.
government. He said that Ocwen would be selling off that servicing portfolio and wouldfocus just on so-called nonagency mortgages.
The company didn’t take questions on the call, which concerned analysts. “We have a
lot of work to do before we can accurately estimate what a post-settlement [Ocwen]
will look like,” Sterne Agee analysts wrote.
Ocwen announced what amounted to a significant plan to downsize going forward,
said Guy Cecala, the publisher of Inside Mortgage Finance, an industry publication.
RELATED
Erbey’s Exit Ends Heady Era at Ocwen (http://www.wsj.com/articles/new-york-financial-regulator-
announces-settlement-with-ocwen-1419257065)
Timeline: Ocwen’s Regulatory Troubles (http://blogs.wsj .com/moneybeat/2014/12/22/ocwens-regulatory-
troubles-a-timeline)
Read the Consent Order (http://dfs.ny.gov/about/ea/ea141222.pdf)
USCA Case #14-5265 Document #1529247 Filed: 12/26/2014 Page 2 of 3
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12/24/2014 Ocwen Shares Fall 16% in Morning Trade - WSJ
http://www.wsj.com/articles/ocwen-shares-fall-16-in-morning-trade-1419348692
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“The non-agency market is much, much smaller, so they are going to be a smaller
company going forward,” said Mr. Cecala. “They have to rethink their whole business
strategy.”
He said that, as a nonbank, Ocwen does not have a deposit base to fall back on, but that
the mortgage-servicing business generally does not require large amounts of capital to
operate. And in his presentation on Monday Mr. Faris said that selling off the agency mortgage rights would free up about $1.7 billion in capital that would be reinvested or
returned to Ocwen’s shareholders.
The company has already been shrinking due to New York State regulator Benjamin
Lawsky’s prohibition on new acquisitions. Ocwen reported that at the end of the third
quarter the balances in its servicing portfolio had declined to $411 billion from $465
billion at the end of last year.
Ocwen also plans to build its small business originating new mortgages while engaging
in transactions to repackage residential mortgage-backed securities, activities that
Mr. Faris said would be profitable.
Write to James Sterngold at [email protected] and Alan Zibel at
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