Ocwen Exploring Sale of Liberty, Reverse Mortgage Assets

Ocwen Financial Corporation (NYSE: OCN) announced late Tuesday that it could potentially sell its reverse mortgage lending arm, Liberty Home Equity Solutions.

“The company is currently evaluating its long-term strategy with respect to its reverse lending activities, including the potential sale of the reverse lending business or some assets of the business,” the company said in an 8-K filing.

The move would allow Ocwen to focus on mortgage servicing and retail forward lending in the future, the company said.

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The West Palm Beach, Fla.-based company earlier this month announced that it was shutting down its forward-loan wholesale operation, but that its forward retail and reverse mortgage channels would remain unaffected. Michael Kent, Liberty’s president, told RMD just this week that it was business as usual at the reverse mortgage lender, which was looking into growing its correspondent, retail, and wholesale channels going into the future.

“Ocwen’s our parent, but we maintain a separate business from our parent,” Michael Kent told RMD. “We run our own business operations. We’re for all practical purposes a standalone, fully-functioning corporate entity.”

Ocwen has suffered multiple setbacks this year, including a wave of enforcement actions regarding its servicing operations and a lawsuit from the Consumer Financial Protection Bureau over a host of alleged violations, including illegal foreclosures and the mishandling of escrow accounts.

The servicer and lender has retained Barclays Capital, Inc. to help advise on “alternatives” for its reverse mortgage assets, Ocwen said in the filing.

Liberty took fourth place in Reverse Market Insight’s most recent list of top 100 lenders, tallying 5,170 endorsements during the 12 months ended August for a 5.6% market share.

Written by Alex Spanko

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  • Where’s the news?

    This shows that publicly traded parents with other interests are rarely interested in a long-term stake in the industry. B of A and MetLife are both examples.

    Walter Investment Management Corporation should have sold off their reverse mortgage interests after testing them out for two years rather than hanging in there until the bitter end.

    I am not complaining in a major cash round up why should reverse mortgage operations be kept if they can be sold?

    Did Ocwen even belong in our industry?

  • Hopefully the amazing people and leadership at Liberty prepared for this, as it seemed likely then when we commented on this 3 months ago and seems likely now. Liberty is a leader and deserves that role! Ocwen, on the other hand… ???
    2bmagoo4u 3 months ago

    Great responses! The “Wells Fargo” of the loan servicing industry has an ego “too big to fail” that sadly resonates historical familiarity. In its wake is industry damaging publicity, ironically the very industry it has reaped behemoth revenue from! They need to exit, but they won’t. So, we will wait until the continued sanctions, heavy duty fines and what is likely to be a showdown with borrower class action suits, any of which will hopefully show them the door! And what happens to Liberty? Take a close look… they are in an expedited hiring mode to quickly place as many reps in the field as they can right now. Mike Kent deserves incredible admiration as he strives forward in what is likely an agenda to prop up their bottom line in revenue and sales force to make them as attractive as possible for some sort of structured “buy out” and cutting their tether to a sinking tanker. Ocwen’s new mantra… “At the end of your rope? Tie a knot and hang on!” Pathetic.

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