Ocwen Financial Corporation (NYSE: OCN) (“Ocwen” or the “Company”),
a leading non-bank mortgage servicer and originator, today
announced the completion of the previously announced transaction
with funds managed by Oaktree Capital Management, L.P. (“Oaktree”)
to operate an MSR investment joint venture, MSR Asset Vehicle LLC
(“MAV”), effective May 3, 2021.
Ocwen and Oaktree will invest up to $250 million of equity
capital into MAV to acquire Fannie Mae and Freddie Mac mortgage
servicing rights (“MSRs”). The parties will fund the investment on
a pro rata basis equal to their respective ownership interest of
15% for Ocwen and 85% for Oaktree. MAV is currently approved to
purchase Freddie Mac MSRs and expects to receive approval to
purchase Fannie Mae MSRs in the near future.
PHH Mortgage Corporation (“PHH”), a wholly-owned subsidiary of
Ocwen, will be the sole provider of subservicing, portfolio
recapture services and certain other administrative services to
MAV. The Company expects that MAV could add up to $60 billion of
subservicing UPB for PHH.
In connection with the closing, Oaktree exercised an option to
purchase 426,705 shares, representing 4.9% of the Company’s
outstanding common stock, at a price per share of $23.15 for
proceeds to Ocwen of approximately $9.9 million. The Company also
issued Oaktree 261,248 four-year warrants to purchase shares of the
Company’s common stock at a price per share of $24.31.
In addition, Ocwen closed the second and final tranche of its
Senior Secured Notes due 2027, issuing Oaktree notes in an
aggregate principal amount of $85.5 million, resulting in net
proceeds to Ocwen before expenses of approximately
$75 million. For additional detail regarding these
transactions, please see the Company’s Form 8-K filed with the
Securities and Exchange Commission on May 6, 2021.
Glen A. Messina, President and CEO of Ocwen, said, “We are very
pleased to complete the transaction and begin operating MAV with
Oaktree. This is an important component of our growth strategy as
it allows us to significantly expand our participation in the bulk
market and grow servicing and subservicing on a capital efficient
basis. Our recently announced transaction with Texas Capital Bank
to purchase $14 billion in bulk MSRs is expected to provide roughly
25% of the targeted servicing UPB for MAV, and we expect to
accelerate funding in the third quarter. We are excited about our
alliance with Oaktree and look forward to working with them to
reach the full potential of MAV.”
About Ocwen Financial Corporation
Ocwen Financial Corporation (NYSE: OCN) is a leading non-bank
mortgage servicer and originator providing solutions through its
primary brands, PHH Mortgage and Liberty Reverse Mortgage. PHH
Mortgage is one of the largest servicers in the country, focused on
delivering a variety of servicing and lending programs. Liberty is
one of the nation’s largest reverse mortgage lenders dedicated to
education and providing loans that help customers meet their
personal and financial needs. We are headquartered in West Palm
Beach, Florida, with offices in the United States and the U.S.
Virgin Islands and operations in India and the Philippines, and
have been serving our customers since 1988. For additional
information, please visit our website (www.ocwen.com).
Forward-Looking Statements
This press release 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 are typically identified by
words such as “expect”, “believe”, “foresee”, “anticipate”,
“intend”, “estimate”, “goal”, “strategy”, “plan” “target” and
“project” or conditional verbs such as “will”, “may”, “should”,
“could” or “would” or the negative of these terms, although not all
forward-looking statements contain these words. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain. 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, but are not limited to, the timing of MAV’s receipt of
Fannie Mae approval; the extent to which MAV will generate
additional subservicing volume; our ability to close recently
announced bulk MSR acquisitions, and the timeline for doing so; the
impact of the transactions on our operations, if executed; our
ability to meet our 2021 new servicing targets; uncertainty
relating to the future impacts of the COVID-19 pandemic, including
with respect to the response of the U.S. government, state
governments, the Federal National Mortgage Association (Fannie
Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and
together with Fannie Mae, the GSEs), the Government National
Mortgage Association (Ginnie Mae) and regulators, as well as the
impacts on borrowers and the economy generally; the adequacy of our
financial resources, including our sources of liquidity and ability
to sell, fund and recover servicing advances, forward and reverse
whole loans, and HECM and forward loan buyouts and put backs, as
well as repay, renew and extend borrowings, borrow additional
amounts as and when required, meet our MSR or other asset
investment objectives and comply with our debt agreements,
including the financial and other covenants contained in them;
increased servicing costs based on increased borrower delinquency
levels or other factors; our ability to collect anticipated tax
refunds, including on the timeframe expected; the future of our
long-term relationship and remaining servicing agreements with New
Residential Investment Corp. (NRZ); our ability to continue to
improve our financial performance through cost re-engineering
efforts and other actions; our ability to continue to grow our
origination business and increase our origination volumes in a
competitive market and uncertain interest rate environment;
uncertainty related to claims, litigation, cease and desist orders
and investigations brought by government agencies and private
parties regarding our servicing, foreclosure, modification,
origination and other practices, including uncertainty related to
past, present or future investigations, litigation, cease and
desist orders and settlements with state regulators, the Consumer
Financial Protection Bureau (CFPB), State Attorneys General, the
Securities and Exchange Commission (SEC), and the Department of
Justice or the Department of Housing and Urban Development (HUD);
adverse effects on our business as a result of regulatory
investigations, litigation, cease and desist orders or settlements
and related responses by key counterparties, including lenders, the
GSEs and Ginnie Mae; our ability to comply with the terms of our
settlements with regulatory agencies, as well as general regulatory
requirements, and the costs of doing so; increased regulatory
scrutiny and media attention; any adverse developments in existing
legal proceedings or the initiation of new legal proceedings; our
ability to interpret correctly and comply with financial and other
requirements of regulators, the GSEs and Ginnie Mae, as well as
those set forth in our debt and other agreements; our ability to
comply with our servicing agreements, including our ability to
comply with our agreements with, and the requirements of, the GSEs
and Ginnie Mae and maintain our seller/servicer and other statuses
with them; our ability to fund future draws on existing loans in
our reverse mortgage portfolio; our servicer and credit ratings as
well as other actions from various rating agencies, including the
impact of prior or future downgrades of our servicer and credit
ratings; as well as other risks and uncertainties detailed in
Ocwen’s reports and filings with the SEC, including our annual
report on Form 10-K for the year ended December 31, 2020 and
current and quarterly reports since such date. Anyone wishing to
understand Ocwen’s business should review our SEC filings. Our
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.
FOR FURTHER INFORMATION CONTACT:
Investors: |
Media: |
June Campbell |
Dico Akseraylian |
T: (856) 917-3190 |
T: (856) 917-0066 |
E:
shareholderrelations@ocwen.com |
E: mediarelations@ocwen.com |
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