Could Ocwen Be Delisted From the NYSE?

Amid ongoing troubles with Ocwen Financial Corporation (NYSE: OCN), the nonbank servicer now faces delisting from the New York Stock Exchange as a result of its failure to comply with continued listing standards. 

Ocwen, the parent company of reverse mortgage lender Liberty Home Equity Solutions, recently received a deficiency letter from NYSE Regulation, Inc., indicating that the company’s failure to timely file its annual report for the fiscal year ended Dec. 31, 2014, has threatened its listing status. 

Previously, Ocwen filed a form with the Securities and Exchange Commission (SEC) on March 3, stating that it would require additional time to complete its annual report, but that it would be filed on or before March 17. Later, the company delayed the release of its annual report again to March 23. 

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That day, Ocwen announced it had received the deficiency letter from NYSE Regulation due to its failure to timely file its annual report. 

“At this time, the company is unable to provide an expected date on which it plans to file its Form 10-K [annual report],” Ocwen writes in a statement released Monday.

Ocwen said in its statement it will need additional time because it continues to analyze and review Home Loan Servicing Solution, Ltd.’s ability to continue to meet its obligations to fund new servicing advances. 

The threat of delisting follows on the heels of the nonbank’s rapid unloading of its mortgage servicing rights (MSRs), having announced plans to sell a $9.6 billion portfolio to a subsidiary of Water Investment Management Corp. (NYSE: WAC) and reports of it selling a $45 billion portfolio of MSRs to JPMorgan Chase & Co. (NYSE: JPM).

The day after its receipt of the deficiency letter, Ocwen also announced its plans to sell a $25 billion portfolio of MSRs to an indirectly held, wholly owned subsidiary of Nationstar Mortgage Holdings Inc. (NYSE: NSM).

Written by Emily Study

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  • While no apparent fault of Liberty, the situation only worsens helping no one in our small industry. With one other significant nonbank servicer in the reverse space one has to wonder if this mess will come to harm not only Liberty but also the other large nonbank servicer as well as the entire reverse mortgage industry.

    This is not the first time Ocwen has refused to meet the demands of a regulator. Look at the situation in California just months ago. Ocwen bought its way out of that situation. What will it do now? Its CEO left in shame just months ago.

    “One bad apple spoils the barrel.” Will this situation harm Liberty and, perhaps the rest of us, worse than the upcoming implementation of financial assessment by lenders? Ocwen’s amazing regulatory strategy is a disaster and only getting worse, much worse.

    The industry will rue the day that NRMLA representing the industry welcomed the entry of Ocwen into our space. Why the other nonbank servicer did not put up some resistance was an interesting strategy on its part. At the time Ocwen bought Liberty, several originators openly questioned how long it would take for the reputation and business practices of Ocwen to catch up to it and spoil things for Liberty and the industry. Yet here we sit waiting for Ocwen’s compliance once again.

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