Former FHA Chief Galante Joins Ocwen Board of Directors

Friday morning, Ocwen Financial Corporation (NYSE: OCN) announced it has added former Commissioner of the Federal Housing Administration (FHA) Carol J. Galante to serve on its Board of Directors.

Effective the day after Ocwen files its 2015 Annual Report on Form 10-K with the Securities and Exchange Commission, Galante will serve on the Board until the company’s next annual meeting of shareholders and until her successor is duly elected and qualified, according to a Form 8-K Ocwen filed with the SEC.

Galante, 61, currently serves as the I. Donald Terner Distinguished Professor in Affordable Housing and Urban Policy and the Faculty Director of the Terner Center for Housing Innovation and the Co-Chair of the Policy Advisory Board of the Fisher Center of Real Estate and Urban Economics at the University of California, Berkeley.

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Most recently, Galante served in the Obama Administration as FHA Commissioner and as Assistant Secretary for Housing from July 2011 to October 2014.

Under her leadership, FHA made some of the most significant changes to the Home Equity Conversion Mortgage (HECM) program, including the development and passage of the Reverse Mortgage Stabilization Act of 2013, along with changes to Principal Limit Factors and the early pioneering of the Financial Assessment.

Prior to her role as FHA chief, Galante served as Deputy Assistant Secretary for the agency’s Office of Multifamily Housing programs from May 2009 to July 2011. Prior to that, she served as President and CEO of BRIDGE Housing Corporation, a non-profit developer of affordable, mixed-income and mixed-use developments in California from 1996-2009.

In her position on Ocwen’s Board, Galante will receive compensation for her services as a director in accordance with the company’s standard compensation program for non-managemen directors, which provides for an annual retainer of $70,000 paid in cash and an annual award of restricted shares of common stock valued at $100,000.

“We are confident that Carol’s housing, mortgage and policy expertise will contribute to meeting our long-term goals and serve the interests of all our stakeholders,” said Ocwen President and CEO Ronald Faris in a written statement.

With the appointment of Galante, Ocwen’s Boad will consist of nine independent directors along with Faris.

The company also announced several other major changes to its Board of Directors on Friday.

Effective March 15, 2016, current independent director Phyllis R. Caldwell will replace Barry N. Wish as Chair of Ocwen’s Board of Directors.

The move comes following Wish’s intention to not stand for re-election at the company’s annual shareholder meeting in May. On a similar note, William H. Lacy, Ocwen Board member since 2002, also informed the company that he does not wish to stand for re-election at the annual meeting.

“We thank both Barry Wish and Bill Lacy for their many years of leadership and service,” commented Faris. “While both Barry’s and Bill’s leadership and expertise will be greatly missed, we look forward to the company’s next chapter under our new Chair Phyllis Caldwell.”

Caldwell joined Ocwen’s Board of Directors in January 2015. A finance and economic development advisor, Caldwell previously served as the Chief of Homeownership Preservation Office at the U.S. Department of the Treasury, where she was responsible for oversight of the U.S. housing market stabilization, economic recovery and foreclosure prevention initiatives established through the Troubled Asset Relief Program (TARP).

Currently, Caldwell serves as the Chair of the Independent Review Committee of Ocwen’s Board and is also a member of the company’s Nomination/Governance Committee, Compliance Committee and Executive Committee.

“I have worked closely with Phyllis over the last year, and she has an ideal blend of experience and knowledge of the mortgage and housing sectors as well as a keen focus on best practices for corporate governance,” Faris said in a prepared statement.

Both Wish and Lacy intend to continue serving as directors until Ocwen’s annual shareholder meeting this May.

Written by Jason Oliva

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  • Let’s get serious. The Ocwen board is in trouble. Fines and fighting with the federal government has done nothing to add to the perception of integrity and trustworthiness to that board.

    Is Carol making a mistake? Is she in over her head? Many see her leaving FHA due to her promise to the House Financial Services Committee in December 2013 that fiscal 2014 would show positive results in the MMI Fund HECM lender reimbursement program. Near the end of that fiscal year, Ms. Galante was gone and the results from lender reimbursement operations showed the largest loss seen in the MMI Fund ever from the HECM program of nearly a negative $7 billion with a transfer of funds to another HUD program of $770 million.

    So not only was the projected positive results a horrendous loss but FHA also paid out $770 million to another HUD program. So why was Carol’s estimate so off? Why was there no control over cash outflow in such a poor year for the HECM program? We will never know because Carol was unavailable for comment.

    Ocwen needs help but can Carol fill the need that Ocwen has?

    • The Cynic seems to imply that Carol Galante departed FHA under a cloud. That is absolutely not the case and yet another example of the Cynic shooting off his (or her) mouth without knowing anything about the facts. Such a useless anonymous contributor to this blog who is obviously afraid to disclose his (or her) identity.

      • Peter,

        As you, in December 2013, I watched Carol take a lot of heat from Republican Congressmen about the fiscal year 2013 actuarial report and the taking of $1,686 billion from the U. S. Treasury in late fiscal 2013. Carol had to all but guaranty those Congressmen that the HECM lender reimbursement program accounted for in the Mutual Mortgage Insurance Fund would show a positive result from operations for fiscal 2014. Operations for fiscal 2014 turned out to be the worst to date.

        If you disagree please state how. To me the foregoing are indisputable facts but maybe I am wrong.

        As FHA Commissioner surely before August 2014 when she left, Carol knew that the outlook for fiscal 2014 HECM operations looked miserable. To me she knew she would be a liability to the HECM program in Congress and chose to leave voluntarily rather than her continued leadership create a problem for the HECM program. To me the Commissioner stepped down so that Congress would not use her to terminate the HECM program.

        The immediately foregoing paragraph could easily be disproved with previously undisclosed and conflicting but verifiable facts. So far that has not occurred despite stating this position several times before.

      • If you think HECM’s performance was a major factor in a Commissioner ‘s decision to move on to an endowed chair at UC Berkeley’s real estate center, a very prestigious position named in memorial to Don Terner, Carol’s predecessor as CEO at BRIDGE Housing, where she was before going to HUD, you are quite mistaken. After several years as DAS for Multifamily Housing and a few more as Commissioner, it was simply time to move on. No need to cast incorrect notions on what happened. It’seems wrong to do and extremely disrespectful.

      • Peter,

        While I understand your view, I still see Carol as someone who stepped aside for the benefit of the HECM program. If she had stepped aside this fiscal year, I would not be giving her so much credit. No matter what we both agree she landed on her feet.

      • Peter,

        I am a little lost.

        The_Cynic comments with a number of facts in his second paragraph and the first sentence of his third paragraph all of which I have confirmed except I have yet to find the old video (although I did see it about the time of the hearing and my memory confirms what The_Cynic says).

        Now as to the speculation about Carol Galante it seems logical although The_Cynic presents limited facts.

        There is little doubt you command the facts to show us why the speculation should be condemned. Please bring those facts to light so that we can all share your view about Carol Galante.

        Thanks.

    • The_Cynic,

      As to verifiable facts, I am troubled to read the following: “Why was there no control over cash outflow in such a poor year for the HECM program?” To say there was NO control over cash outflow is a condition the outside, independent auditors of the MMI Fund would have reported on. Yet no such accusation was made by the auditors. Perhaps you meant to say something like: “Why was there a $770 million disbursement made to another program in such a poor year for the HECM program.

      While I am not exactly certain what Mr. Peter Bell had a problem with, I found your statement about “no control over cash outflow” to be over the top and one you should retract.

      • James,

        I have thought over what I wrote in light of your comment and you are correct I overstated my case as to cash outflow; therefore, I revised and deleted my exaggerated statements.

        For those errors I apologize to Carol, FHA, and readers.

        Thank you.

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