Ocwen Financial Corp.
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Ocwen Financial Corporation is a provider of residential and commercial
mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...
loan servicing Loan servicing is the process by which a company (mortgage bank, servicing firm, etc.) collects interest, principal, and escrow payments from a borrower. In the United States, the vast majority of mortgages are backed by the government or governme ...
, special servicing, and asset management services, which has been described as " debt collectors, collecting monthly principal and interest from homeowners". Ocwen was founded in 1988 by
William Erbey William Erbey is an American businessman and the founder of Ocwen Financial Corporation. Erbey made billions during the subprime mortgage crisis by positioning Ocwen to take advantage of larger banks leaving the market; however, he later lost muc ...
and is headquartered in
West Palm Beach, Florida West Palm Beach is a city in and the county seat of Palm Beach County, Florida, United States. It is located immediately to the west of the adjacent Palm Beach, which is situated on a barrier island across the Lake Worth Lagoon. The populati ...
, with additional offices in Mount Laurel, NJ,
Rancho Cordova, California Rancho Cordova is a city in Sacramento County, California, United States which was incorporated in 2003. It is part of the Sacramento Metropolitan Area. The population was 64,776 at the 2010 census. In 2010 and 2019, Rancho Cordova was named ...
, and St. Croix, U.S. Virgin Islands. It also has support operations in the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
and
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
. Ocwen's Slogan is "Helping Homeowners Is What We Do."


Corporate affairs

Ocwen is licensed to service mortgage loans in all 50 states, the District of Columbia and two U.S. territories. Ocwen has been servicing residential mortgage loans since 1988 and subprime mortgage loans since 1994. As of 2010, Ocwen's subprime servicing volume was $56 billion, ranking it fourth in subprime servicing behind American Home Servicing ($78 billion), Bank of America/Countrywide ($82 billion), and Chase Home Finance ($90 billion). As of December 31, 2011, Ocwen had serviced 671,623 residential loans with an aggregate
unpaid principal balance Unpaid principal balance (UPB) is the portion of a loan (e.g. a mortgage loan) at a certain point in time that has not yet been remitted to the lender. For a typical consumer loan such as a home mortgage or automobile loan, the original unpaid pr ...
(UPB) of $102.2 billion. As of February 26, 2014, with rights to service a mortgage portfolio of over $500 billion in UPB, it is the biggest non-bank servicer of U.S. mortgages.


Acquisitions

In June 2013, Ocwen Financial (OCN), the nation's fourth-largest mortgage servicer, bought the rights to service $78 billion in mortgages from
OneWest Bank OneWest Bank, a division of First Citizens BancShares, is a regional bank with over 60 retail branches in Southern California. OneWest Bank specializes in consumer deposit and lending including personal checking and savings accounts, Money Market ...
, the former IndyMac Bancorp. In September 2010, Ocwen, through Ocwen Loan Servicing, LLC (OLS), a wholly owned subsidiary of Ocwen, acquired the U.S. non-prime mortgage servicing business of Barclays Bank PLC, known as HomEq servicing. While the transaction did not result in the transfer of ownership of any legal entities, OLS acquired the mortgage servicing rights (MSRs) and associated servicer advances of the business as well as the servicing platforms based in Sacramento, California, and Raleigh, North Carolina, for an initial aggregate purchase price of $1.2 billion. With the close of the HomEq acquisition, Ocwen boarded onto its servicing platform approximately 134,000 residential mortgage loans with an aggregate UPB of approximately $22.4 billion. In September 2011, Ocwen completed its acquisition of outstanding partnership interests of Litton Loan Servicing LP and certain interest-only servicing securities previously owned by Goldman Sachs & Co. from Goldman Sachs. Following this $247.2 million worth acquisition, Ocwen became the largest subprime mortgage servicer in the U.S. The Litton acquisition increased Ocwen's servicing portfolio by 245,000 residential mortgage loans with an aggregate UPB of approximately $38.6 billion. Litton Loan Servicing signed a consent order over their
loan servicing Loan servicing is the process by which a company (mortgage bank, servicing firm, etc.) collects interest, principal, and escrow payments from a borrower. In the United States, the vast majority of mortgages are backed by the government or governme ...
practices. In April 2012, Ocwen closed on the purchase of approximately $22 billion of mortgage servicing rights from Saxon Mortgage Services, a unit of
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
. Saxon Mortgage signed consent orders with federal regulators because of its mortgage loan servicing practices. In June 2012, Ocwen completed its purchase of Aurora Bank's commercial servicing rights portfolio. In October 2012, Ocwen announced plans to buy Homeward Residential Holdings, Inc. from WL Ross & Co. for $750 million. Homeward consisted of the mortgage servicing from
American Home Mortgage American Home Mortgage Investment Corporation was the 10th largest retail mortgage lender in the United States and was structured as a real estate investment trust (REIT). In 2007, it filed for bankruptcy and was liquidated. The company was foc ...
and Option One Mortgage. The acquisition was finalized on December 27, 2012. As a result of the acquisition, the
Jacksonville, Florida Jacksonville is a city located on the Atlantic coast of northeast Florida, the most populous city proper in the state and is the List of United States cities by area, largest city by area in the contiguous United States as of 2020. It is the co ...
site was closed laying off all 370 employees and 325 employees at Homeward's Coppell, Texas location were laid off. In October 2012, Ocwen also partnered with Walter Investment Management Corp. to place the winning $3 billion bid for
Residential Capital GMAC ResCap, Inc. was a residential mortgage loan originator and servicer based in Minneapolis, United States. As a result of its exposure to subprime lending during the subprime mortgage crisis, the company filed for bankruptcy protection in 201 ...
's mortgage-servicing and origination assets at a bankruptcy auction. Additionally, the company entered into an agreement with
Genworth Financial Genworth Financial is an S&P 400 insurance company. The firm was founded as The Life Insurance Company of Virginia in 1871. In 1986, Life of Virginia was acquired by Combined Insurance, which became Aon plc in 1987. In 1996, Life of Virginia w ...
Corp. to acquire Genworth Financial Home Equity Access Inc. for $22 million. In February 2012, Gleacher & Co. announced the sale of its mortgage unit ClearPoint to Ocwen. In June 2013, Ocwen Financial Corp. (OCN), a provider of loan and asset-management services, agreed to buy contracts to handle payment collections on about $78 billion of mortgages from OneWest Bank FSB for $2.53 billion. On February 27, 2018, Ocwen Financial Corporation entered into definitive agreement to acquire PHH Corporation for $360 million. On October 4, 2018 Ocwen Financial Corporation officially acquired PHH Corporation for approximately $360 million. Along with the acquisition, Ocwen announced Glen A. Messina would become the President and CEO and a member of Ocwen's Board of Directors.


Status of Ocwen due to merger with PHH Mortgage

On June 6, 2019 Ocwen Financial Corporation/Ocwen Loan Servicing is merging all loans that are currently serviced by Ocwen Loan Servicing into PHH Mortgage. The merger also allows more for both of the companies because PHH Mortgage does do actual new mortgages and refinance rather than Ocwen before just doing servicing of loans. On October 4, 2018 Ocwen Financial completed its acquisition of PHH Corporation and is now a wholly owned subsidiary of Ocwen Financial Corp.


Home Affordable Modification Program

Ocwen is a participant in the
U.S. Treasury Department The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...
's Home Affordable Modification Program (HAMP), which is designed to use loan modifications to help homeowners facing foreclosure. Ocwen early on posted relative success in converting trial loan modifications to permanent ones, in part because it relied on verified income statements from borrowers rather than stated ones. In August 2010, Ocwen enacted a Shared Appreciation Modification (SAM) program that reduces a qualified delinquent borrower's principal to 95% of the home's current market value, but requires the homeowner to later share 25% of the home's appreciation with the investors when the home is eventually sold or refinanced. In 2011, Ocwen reported that it had modified more than 200,000 troubled loans since the mortgage crisis began in the mid-2000s.


Altisource spinoff

In August 2009, Ocwen completed the distribution of its Ocwen Solutions (OS) line of business via the spinoff of a separate publicly traded company called Altisource (). Ocwen claimed that the Separation has allowed it to focus on its core servicing business and to respond better to initiatives and market challenges. OS consisted of the former unsecured collections business, residential fee-based loan processing businesses and technology platforms as well as the international commercial loan servicing business conducted through Global Servicing Solutions, LLC (GSS) and the equity investment in BMS Holdings (subsequently changed to BHI Liquidation). With the exception of interests in GSS and BMS Holdings, Inc., Ocwen distributed the assets, liabilities, and operations of OS in the spinoff. Altisource specializes in
Real Estate Owned Real estate owned, or REO, is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing ...
(REO) and related business activities.


Home Loan Servicing Solutions spinoff

Ocwen Financial Corporation spun off Home Loan Servicing Solutions (HLSS) in 2010. Founded by Ocwen Financial Corporation's Executive Chairman
William Erbey William Erbey is an American businessman and the founder of Ocwen Financial Corporation. Erbey made billions during the subprime mortgage crisis by positioning Ocwen to take advantage of larger banks leaving the market; however, he later lost muc ...
, HLSS was created to acquire mortgage servicing assets including servicing rights, rights to fees, and other income from servicing loans. In February 2011, HLSS announced its plan for an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
. The company raised $186.2 million in its February 2012 IPO and is traded on NASDAQ.


Employees

As of September 30, 2018, Ocwen reported as having 6,400 employees worldwide, of which approximately 4,300 are employed in their
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
operations centers, and 500 in the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
. Their operations in India and the Philippines primarily provide internal support services, principally to their loan servicing business and corporate functions. Of their foreign-based employees, more than 80% were engaged in supporting the loan servicing operations as of September 30, 2018.


Controversies

In July 2002, Kweku Hanson, a Connecticut attorney, initiated a
class-action suit A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
against Ocwen Federal FSB of West Palm Beach, Florida, and he was represented in this by fellow attorney Paul Ngobeni. The 123-page lawsuit in ''Hanson v. Ocwen Federal Bank'' outlined a six-year running battle over late charges and fees. He was joined in the suit by 57 individuals who claimed to have been injured by Ocwen. The lawsuit sought $1.5 billion in punitive and exemplary damages but was settled out of court for an undisclosed sum. On December 19, 2013,
California Attorney General The attorney general of California is the state attorney general of the Government of California. The officer's duty is to ensure that "the laws of the state are uniformly and adequately enforced" (Constitution of California, Article V, Section ...
Kamala D. Harris announced a $2.1 billion mortgage settlement with Ocwen Financial Corporation and Ocwen Loan Servicing over alleged mortgage servicing misconduct. California homeowners eligible to receive an estimated $268 million in first lien principal reductions and nearly $23 million in cash payments. This agreement is with a total of 49 states with $2 billion used to cover loan modifications and principal reductions for the people who lost their homes between January 1, 2009, and December 21, 2012, and those people whose loans were serviced by OCWEN. "OCWEN took advantage of borrowers at every stage of the process", said Richard Cordray, Director of the
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mo ...
. As part of the agreement, founder
William Erbey William Erbey is an American businessman and the founder of Ocwen Financial Corporation. Erbey made billions during the subprime mortgage crisis by positioning Ocwen to take advantage of larger banks leaving the market; however, he later lost muc ...
resigned from the company's board over conflicts of interest, though Ocwen paid him $1.2 million dollars in the process.


References


External links


A copy of the 67-page California ComplaintA copy of the 173-page California Consent OrderFDIC report on Ocswen liquidation
{{Authority control Companies listed on the New York Stock Exchange Financial services companies of the United States