Ocwen
Financial Corporation (Ocwen or the Company) provides the following updates.
Settlement
of “Opt-Out” Securities Litigation
Ocwen
has reached an agreement in principle to settle the previously disclosed “opt-out” securities fraud action brought
on behalf of certain putative shareholders of Ocwen in a lawsuit captioned
Broadway Gate Master Fund, Ltd. et al. v. Ocwen
Financial Corporation et al., 9:16-cv-80056-WPD (S.D. Fla.)
. As previously disclosed, the litigation involved allegations
in connection with the restatements of the Company’s 2013 and first quarter 2014 financial statements, among other matters.
Following
a mediated settlement process resulting in all parties’ acceptance of the mediator’s recommendation for settlement,
the parties advised the presiding Court of the settlement in principle and the Court postponed the trial date to allow finalization
of the settlement. The parties are currently working on definitive settlement documentation and, assuming the settlement is finalized
pursuant to the settlement in principle, it will include an aggregate cash payment by the Company of $36 million.
While
the Company believes that it has sound legal and factual defenses, Ocwen agreed to this settlement in order to avoid the uncertain
outcome of trial and the additional expense and demands on the time of its senior management that a trial would involve. In the
event the settlement is not finalized, the litigation would continue and we would vigorously defend the allegations made against
Ocwen. Additional lawsuits may be filed against us in relation to these matters. If we are not successful in our efforts to defend
ourselves against claims made against us, our business, financial condition, liquidity and results of operations could be materially
and adversely affected.
Agreement
with CIT Bank, N.A. relating to Indemnification Obligations
Ocwen
has entered into an agreement with CIT Bank, N.A. (formerly OneWest Bank, FSB or OneWest) relating to certain claims arising from
indemnification obligations under a 2013 transaction pursuant to which Ocwen acquired certain mortgage servicing rights and related
servicing advance receivables from OneWest. Pursuant to the agreement, CIT Bank, N.A. will pay Ocwen $29.9 million.
State
Regulatory Matters
As
previously disclosed, Ocwen is seeking timely resolutions to the regulatory actions taken against us on April 20, 2017 or shortly
thereafter by mortgage and banking regulatory agencies from 30 states and the District of Columbia and two state attorneys general
that alleged deficiencies in our compliance with laws and regulations relating to our servicing and lending activities. In the
Company’s prior Current Reports on Form 8-K filed with the Securities and Exchange Commission (SEC), Ocwen made disclosures
relating to resolutions with 22 of these jurisdictions.
Ocwen
has entered into an additional agreement to resolve the regulatory action brought by Nebraska. The agreement with Nebraska generally
contains key terms that are similar to the agreements Ocwen previously disclosed and which Ocwen has summarized in its prior SEC
filings (the Multi-State Common Settlement Terms).
As
of December 1, 2017, the total number of jurisdictions where we have reached a resolution is 23.
Ocwen
continues to seek timely resolutions with the remaining eight regulatory agencies and two state attorneys general. If Ocwen is
successful in reaching such resolutions, they may contain some or all of the previously disclosed Multi-State Common Settlement
Terms and may also contain additional terms, including potentially monetary fines or penalties or additional restrictions on our
business. There can be no assurance that Ocwen will be able to reach resolutions with the remaining regulatory agencies and state
attorneys general. It is possible that the outcome of these matters, whether through negotiated settlements, court rulings or
other resolutions, could be materially adverse to our business, reputation, financial condition, liquidity and results of operations.
Special
Note Regarding Forward-Looking Statements
This
Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified
by a reference to a future period or by the use of forward-looking terminology. Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Our business has been undergoing substantial change which has magnified such
uncertainties. Readers should bear these factors in mind when considering such statements and should not place undue reliance
on such statements. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual
results to differ materially. In the past, actual results have differed from those suggested by forward looking statements and
this may happen again. Important factors that could cause actual results to differ materially from those suggested by the forward-looking
statements include those described in Ocwen’s reports and filings with the SEC, including its amended 2016 Annual Report
on Form 10-K/A and its current and quarterly reports since such date. Anyone wishing to understand Ocwen’s business should
review our SEC filings. Ocwen’s forward-looking statements speak only as of the date they are made and we disclaim any obligation
to update or revise forward-looking statements whether as a result of new information, future events or otherwise. Ocwen may post
information that is important to investors on our website.