Banking, finance, and taxes
Ocwen Dumps Servicing Rights on $25 Billion in Mortgages
Published:
Last Updated:
No closing date on the transaction was given, but the two companies expect the deal to close before mid-year.
Ocwen said Monday that the New York Stock Exchange had threatened to delist the stock for the company’s failure to file its 2014 annual statement on time. The company also said that it did not know when it would be able to file the documents.
The transaction announced Tuesday totals nearly $35 billion toward an announced goal to shed servicing rights to $55 billion in agency-backed loans. The company has said that it expects the sales to generate approximately $550 million in proceeds over the next six months.
ALSO READ: 5 Oil and Gas Stocks Analysts Want You to Buy
Regarding Tuesday’s announcement, Ocwen CEO Ron Faris said:
This 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.
Jay Bray, CEO of Nationstar, commented:
This transaction builds upon our strong track record of portfolio acquisitions while serving the needs of homeowners, and we look forward to expeditiously closing and boarding this portfolio. We will continue to work cooperatively with Ocwen as they evaluate the sale of additional agency portfolios and look forward to continuing discussions with all counterparties.
As Ocwen sells what is arguably the good stuff — performing agency-backed loans — it will become smaller and its portfolio of less-good stuff, like nonperforming and subprime loans, will become a larger share of its business. That prospect has left trustees and master servicers for 119 agency-backed securities trusts with less-than-generous feelings about Ocwen. In a rebuttal published Monday to a January letter from the trustees charging the company with nonperformance, Ocwen countered that it is “uniquely positioned in the market to handle the special demands of servicing subprime loans in a manner consistent with servicing standards that achieve positive investor outcomes.”
Ocwen’s shares traded down more than 6% in Tuesday’s premarket session to around $8.20. Shares closed at $8.80 on Monday, in a 52-week range of $5.66 to $40.44.
ALSO READ: 11 Analyst Stock Picks Under $10 With Huge Upside Targets
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.
Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.
But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.