UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 19, 2013
OCWEN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
| Florida | 1-13219 | 65-0039856 | ||
| (State
or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2002 Summit Boulevard, Sixth Floor
Atlanta, Georgia 30319
(Address of principal executive offices)
Registrant’s telephone number, including area code: (561) 682-8000
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01 | Other Events. |
Ocwen Financial Corporation (“Ocwen”) has reached an agreement, which is subject to court approval, regarding previously disclosed matters for which a reserve was previously established, involving the federal Consumer Financial Protection Bureau (CFPB) and various state attorneys general and other agencies that regulate the mortgage servicing industry (collectively, “Regulators”). As further detailed below, during the second quarter of 2013, Ocwen established a reserve which is expected to cover all but approximately $0.5 million of its direct payment obligations in connection with the agreement.
The agreement has four key elements:
| · | A
commitment
by
Ocwen
to
service
loans
in
accordance
with
specified
servicing
guidelines
and
to
be
subject
to
oversight
by
an
independent
national
monitor
for
three
years.
Ocwen
is
presently
subject
to
substantially
the
same
guidelines
and
oversight
with
respect
to
the
portion
of
its
servicing
portfolio
acquired
from
ResCap
in
early
2013. |
| · | A
payment
of
$127.3
million,
which
includes
a
fixed
amount
for
administrative
expenses,
to
a
consumer
relief
fund
to
be
disbursed
by
an
independent
administrator
to
eligible
borrowers.
Pursuant
to
indemnification
and
loss
sharing
provisions
of
applicable
acquisition
documents,
approximately
half
of
this
consumer
relief
fund
payment
is
to
be
funded
by
the
former
owners
of
certain
servicing
portfolios
previously
acquired
by
Ocwen
and
integrated
into
Ocwen’s
servicing
platform.
Ocwen
previously
established
a
reserve
of
$66.4
million
during
the
second
quarter
of
2013
with
respect
to
its
portion
of
the
payment
into
the
consumer
relief
fund.
This
reserve
is
expected
to
cover
all
but
approximately
$0.5
million
of
Ocwen’s
portion
of
the
consumer
relief
fund
payment. |
| · | A
commitment
by
Ocwen
to
continue
its
principal
forgiveness
modification
programs
to
delinquent
and
underwater
borrowers,
including
underwater
borrowers
at
imminent
risk
of
default,
in
an
aggregate
amount
of
at
least
$2
billion
over
three
years.
These
and
all
of
Ocwen’s
other
loan
modifications
are
designed
to
be
sustainable
for
homeowners
and
also
provide
positive
net
present
value
outcomes
for
mortgage
loan
investors.
Principal
forgiveness
as
part
of
a
loan
modification
is
determined
on
a
case-by-case
basis
in
accordance
with
the
applicable
servicing
agreement.
Principal
forgiveness
does
not
involve
an
expense
to
Ocwen
other
than
the
operating
expense
incurred
in
arranging
the
modification,
which
is
part
of
Ocwen’s
role
as
loan
servicer. |
| · | Ocwen and the former owners of certain of the acquired servicing portfolios will receive from the Regulators comprehensive releases, subject to certain exceptions, from liability with respect to residential mortgage servicing, modification and foreclosure practices. |
If the agreement is approved, it will be reflected in a consent judgment of the United States District Court for the District of Columbia.
Forward Looking Statements
This document 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. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. 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 following: the characteristics of our servicing portfolio, including prepayment speeds along with delinquency and advance rates; our ability to grow and adapt our business, including the availability of new loan servicing and other accretive business opportunities; our ability to successfully modify delinquent loans, manage foreclosures and sell foreclosed properties; our ability to effectively manage our exposure to interest rate changes; uncertainty related to general economic and market conditions, delinquency rates, home prices and disposition timelines on foreclosed properties; uncertainly related to acquisitions, including our ability to integrate the systems, procedures and personnel of acquired assets or businesses; as well as other risks detailed in Ocwen’s reports and filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2012 and its quarterly reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013. Anyone wishing to understand Ocwen’s business should review such filings. The forward-looking statements speak only as of the date they are made and except for our ongoing obligations under the U.S. federal securities laws, we undertake no obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
OCWEN FINANCIAL CORPORATION (Registrant) | ||
| Date: December 19, 2013 | By: | /s/ John V. Britti |
| John V. Britti | ||
| Executive Vice President & Chief Financial Officer | ||
(On behalf of the Registrant and as its principal financial officer) | ||