Hundreds of millions of dollars in anticipated fourth-quarter charges have been disclosed by Ocwen Financial Corp., which is taking steps to shore up liquidity.
The Atlanta-based company had already given notice last month in a filing with the Securities and Exchange Commission that it expected $127 million in charges.
Those charges included $50 million in expenses related to the settlement with the
New York Department of Financial Services, $64 in uncollectable receivables expense and $13 million in third-party monitoring costs.
On Monday, Ocwen
said it expects to get hit with a $370 million to $420 million non-cash charge to goodwill in the fourth quarter.
In addition, it will create a $15 million reserve tied to its erroneous dating scandal.
Ocwen is seeking an SEC extension until March 17 to file its Form 10-K without a penalty.
“Ocwen requires this extension to complete its goodwill valuation analysis and its financial closing procedures and to ensure appropriate disclosure of various recent events impacting the company,” the statement said.
Ocwen outlined a number of steps it is taking to improve liquidity, including amending a $1.3 billion senior term loan.
It also has signed a letter of intent to sell mortgage servicing rights on 277,000 performing agency loans for $45 billion. A mid-year close is anticipated.
“Including its previously announced $9.8 billion MSR sale to Nationstar, Ocwen is on track to sell agency MSRs relating to approximately $55 billion of unpaid principal balance in the next six months for prices significantly above its estimated carrying value at Dec. 31, 2014,” the statement said. “Ocwen currently anticipates that these transactions will generate approximately $550 million of proceeds over the next six months and accelerate Ocwen’s strategy to reduce the size of its agency servicing portfolio.”
Ocwen also said it reached a deal to sell non-performing and performing loan assets for $40 million in a deal expected to close by the end of this month.
The mortgage servicer noted that it reached an agreement with a “global financial institution” to replace a $450 million servicing advance facility.
The notice went on to say that Ocwen isn’t aware of any pending
material fines, penalties or settlements with state regulators.
Ocwen said that two notices it received terminating it as servicer on residential mortgage-backed securities represents just 0.07 percent of its overall servicing portfolio.
