Banking, finance, and taxes
Will Ocwen Survive Legal Onslaught?
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Just when Ocwen Financial Corp. (NYSE: OCN) thought it had made it out of 2014 alive, reality checked back in. California regulators are currently looking to suspend the company’s mortgage license because Ocwen has failed to provide the state with information that proves it has complied with state laws. The question now is whether the company can survive the legal onslaught that it is facing in California.
According to Tom Dressler, a spokesperson for the California Department of Business Oversight, the agency has attempted to get this information from Ocwen for roughly a year now. However the company has repeatedly failed to comply.
Ocwen is one of the largest providers of mortgage services in the United States, and this would be devastating to its position in California.
Previously, the company reached a comprehensive settlement with the New York Department of Financial Services regarding the recent investigation. Ocwen set aside $100 million for the settlement in its third-quarter financial statement. However, the total charge would be $150 million for the settlement, where each current and former New York borrower whose home was foreclosed will receive $10,000 from the company.
This issue arose in New York when Ocwen was accused of doing nothing to investigate or address the backdating issue when an employee questioned the accuracy of the firm’s letter dating processes and alerted the vice-president of Compliance. Then the department said that Ocwen ignored the problem for five months until the same employee raised the issue again.
Since this first news broke, the company has scrambled to pick up the pieces, and it has not been going well.
Ocwen was devastated in Tuesday’s regular trading session, as shares closed down 36% at $7.77. For the full year 2014, Ocwen was down 72.8%.
The stock has a consensus analyst price target of $23.00 and a 52-week trading range of $7.38 to $55.87.
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