Ocwen Financial Corp. again delayed the expected filing of its
annual report and said it is continuing to review the ability of
affiliate Home Loan Servicing Solutions Ltd. to fund new servicing
advances.
The embattled mortgage-servicing company warned in a regulatory
filing that a failure by Home Loan to fund new serving advances
could have a material negative impact on its financial
condition.
Ocwen said it now expects to file its annual report by Monday.
It had previously received an extension through Tuesday.
Shares dropped 7% to $8.36 in early trading and are down 45% so
far this year.
Additionally, Ocwen said it is clarifying for its auditor the
appropriateness of adding back a charge of $150 million as an
extraordinary item for certain covenant calculations in one of its
advance financing facilities. That charge is tied to a settlement
with New York's top financial regulators over alleged homeowner
abuses. The firm's executive chairman also resigned in connection
with that deal, and Ocwen agreed to the appointment of an outside
monitor.
Ocwen, which previously warned it would post a loss for the
quarter and 2014, has also entered into an amendment to its term
loan to remove certain restrictions on asset sales and permanently
increase a financial covenant. It has also said its fourth-quarter
results would include a goodwill write-down of about $370 million
to $420 million.
The Wall Street Journal reported Tuesday that Ocwen agreed to
sell $45 billion of mortgage-servicing rights to J.P. Morgan Chase
& Co., following through on previous statements that it planned
to shrink the business.
For Ocwen, the deal continues its dramatic evolution into a much
smallerfirm.
The company said it was also going to sell off the rights to
service mortgages owned by the government-supported entities,
Freddie Mac and Fannie Mae.
In recent months some large institutional investors have sought
to have Ocwen removed as the servicer of some large portfolios in
mortgage-backed securities, saying that it had performed poorly and
had defaulted due to recent downgrades of its rating by
credit-rating firms.
For its part, Home Loan Servicing said last month it had agreed
to be acquired by New Residential Investment Corp., an affiliate of
Nationstar.
Write to Angela Chen at angela.chen@dowjones.com
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