-
Ocwen Financial in Atlanta has agreed to buy Homeward Residential Holdings from WL Ross & Co. for $750 million in cash and stock.
October 3 -
The future is bright for mortgage servicers, but his PE firm agreed to sell Homeward Residential to Ocwen because it had held the investment long enough — and owning stock in a bigger servicer will pay off, billionaire Wilbur Ross said.
October 3 -
Ocwen Financial (OCN) in Atlanta has hired a mortgage industry veteran to fill a new position for government and community relations.
August 16 -
Ocwen Financial in Atlanta reported record levels of revenue in the second quarter after almost doubling the size of its mortgage servicing portfolio in the last 12 months.
August 2
Fitch Ratings warned of a possible downgrade of Ocwen Financial (OCN) after the Atlanta company agreed to buy Homeward Residential Holdings from WL Ross & Co.
Although Fitch views the deal as "strategically complementary to Ocwen's current business model, there remain near-term integration and execution risks" that may lead to "potential service disruptions, which may ultimately impact cash flow generation," Fitch said Monday in a news release.
Fitch remains concerned about possible "leverage implications and integration risks associated with Ocwen's ongoing growth through large, opportunistic portfolio acquisitions." It also pointed to heightened regulatory scrutiny of the overall sector as possibly weighing on Ocwen's risk profile.
Ocwen's current rating of B+ long-term issuer default rating was placed on a negative watchlist, Fitch said. Fitch affirmed Ocwen's short-term issuer default rating at B.
The mortgage servicer, which specializes in distressed and subprime loans, has been on a shopping spree. It has picked up businesses in areas where its big bank competitors are struggling and has
Ocwen said last week it would
Ocwen would pay $588 million in cash and $162 million in convertible stock. Fitch said it did not anticipate Ocwen taking on debt to finance the deal but that overall leverage would increase on a pro forma basis as the company would assume roughly $2.3 billion in Homeward's existing servicing advances.
Homeward services roughly 422,000 mortgage loans with an aggregate unpaid principal balance of more than $77 billion. The deal would bring Ocwen's combined mortgage servicing portfolio to 1.2 million mortgage loans with an unpaid principal balance of about $209 billion.
