Loan-servicing company Ocwen Financial explodes higher after unloading a bunch of assets
Mortgage servicer Ocwen Financial surged as much as 46% on Monday after saying it will sell $425 million of assets to help boost the company’s finances.
New Residential Corporation will purchase mortgage servicing rights from Ocwen in a transaction and start a new five-year subservicing agreement, the company said in a statement. In addition to the upfront cash payment, New Residential will also make an equity investment in Ocwen and become a 4.9% owner.
“We would expect the shares to do well both on earnings and on the Ocwen transaction,” according to Keefe, Bruyette & Woods analyst Bose George.
It’s welcome news for Ocwen, which lost more than half its market value last month after the US Consumer Financial Protection Bureau sued the company and its subsidiaries, alleging the mortgage loan servicer’s “years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes.”
Ocwen surged 45% to $3.32 per share at 12:06 p.m. ET after trading was halted earlier in the morning. New Residential climbed as much as 3.1% on the day.