Embattled mortgage-servicing company Ocwen Financial Corp. on
Friday touted the progress it is making in selling off its
servicing rights and improving its compliance, a day after Standard
& Poor's Ratings Services put the company's servicer ratings on
watch for a downgrade.
In placing Ocwen's residential ratings on CreditWatch negative,
S&P cited regulatory and investor scrutiny of the company and
some high-risk findings from internal audits related to its
servicing and default operations.
Ocwen described S&P's decision as a surprise and said it has
made progress in resolving its regulatory problems.
A downgrade in Ocwen's servicer ratings could affect its ability
to sell and fund servicing advances.
Ocwen has been ensnared in regulatory problems for the past two
years. In December, Ocwen reached a settlement with New York state
regulators over alleged improper servicing practices for distressed
borrowers.
Ocwen on Friday said it isn't aware of any unresolved issues
with state agencies or any material fines, penalties, or
settlements.
Ocwen has been working to cut its risk exposure by selling
servicing rights for mortgages owned by government-supported Fannie
Mae and Freddie Mac. Ocwen said the sales have boosted liquidity
and simplified its operations structure. It also noted that it has
invested in improving its risk and compliance procedures and grown
its internal audit staff.
Moody's Investors Service, meanwhile, upgraded Ocwen's corporate
family, senior secured bank credit facility, and senior unsecured
debt ratings earlier this week, citing improved liquidity.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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