By Tess Stynes
Ocwen Financial Corp. agreed to sell mortgage servicing rights
on an additional $25 billion of loans held by Fannie Mae and
Freddie Mac to Nationstar Mortgage Holdings Inc.
The deal comes a day after the embattled mortgage-servicing
company disclosed it had been threatened with a possible delisting
by the New York Stock Exchange for failing to file its 2014 annual
financial statement on time, and that it wasn't certain when it
would file the required statements.
Ocwen shares fell 11% to $7.80 in recent premarket trading.
Chief Executive Ron Faris said in a news release Tuesday that
the "transaction, on top of the one announced in February between
Ocwen and Nationstar, furthers our announced corporate strategy and
demonstrates the strong working relationship we have developed with
Nationstar."
Ocwen has been selling off its servicing rights for mortgages
owned by the government-supported entities Fannie Mae and Freddie
Mac and intends to focus on so-called nonagency mortgages.
The company reached a deal in February to sell $9.8 billion in
servicing rights to Nationstar. It later sold servicing rights to
J.P. Morgan Chase & Co. and Green Tree Loan Servicing LLC.
Mortgage servicers collect payments from homeowners and
distribute the payments to investors who own the loans through
mortgage securities.
Nationstar CEO Jay Bray said his company plans to continue to
work cooperatively with Ocwen as it evaluates the sale of
additional agency portfolios.
The NYSE warning followed a series of challenges for Ocwen. The
company agreed in December to pay $150 million, and William Erbey,
its executive chairman, agreed to step down after New York state's
Department of Financial Services alleged Ocwen had engaged in
improper servicing practices for distressed-mortgage borrowers and
had questionable dealings with affiliated companies.
Ocwen said the principal reason it had missed deadlines to make
the disclosures was because it needed more time "to analyze and
review" an affiliated company that finances the purchase of
mortgage-servicing rights for Ocwen. The company is looking into
whether the company, Home Loan Servicing Solutions Ltd., has the
"ability to continue to meet its obligations to fund new servicing
advances."
Write to Tess Stynes at tess.stynes@wsj.com
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