Ocwen Financial Corp (NYSE:OCN) is considering to overturn contracts, which include servicing rights to $90 billion worth mortgages. This is just one of the many cuts that the company is making to its portfolio, after running into a few bad situations. The company has come under fire from the New York department of financial services, due to the way it conducts its transactions.
However, the settlement regarding the matter has been made, with Ocwen paying $150 million as penalty and restitution to the state. The company’s chairman, William Erbey, was also asked to step down as part of the settlement. The Consumer Federal Protection Bureau received 13,500 complaints against Ocwen.
The deals were disclosed in a presentation to lenders as potential losses. Currently, Ocwen is also facing a risk of closure. The NYSE has already stated that since the company has failed to file its 10-K form, it is no longer in compliance with the listing standards. The financial report was also not expected to be very good. As per the FY2014, the company had a loss in revenues in its year-over-year earnings. The loss was amounted to $550 million. Ocwen also faces liquidity issues.
Ocwen has finally announced its 1Q2015, just before the end of April. The report has come as a surprise since it beat estimates. Ocwen reported $0.27 in EPS while the consensus had reported and expectation of $0.14 only. The company also had revenues of $510.40 million, compared to estimates of $483.5 million. The delay in this announcement was the recognition of losses from relinquishing the bad contracts. The sale of the $90 billion worth servicing rights had also been estimated to return $880 million to the company, with a gain of $186 million. Although, the recent developments reflect that the company is in deep peril, it might not be as bad as the analysts believe.
Ocwen Financial Corp (NYSE:OCN) closed at $10.26 after gaining 20.85% on May 1. The company has 125.22 million shares in the market, with a 52-week range of $5.66-$38.80.
