BeerBBQ Posted March 28, 2016 Share Posted March 28, 2016 Looks like the reason they only bought back a miniscule amount of stock in Q4 and why they aren't going to be buying a meaningful amount back anytime soon is because they can't. http://www.sec.gov/Archives/edgar/data/873860/000101905616001217/0001019056-16-001217-index.htm With the stock trading at $2.50, the market price is implying there will be a $550m deterioration in shareholders equity in the future? It seems the market is concerned about: 1) current level of monitor/legal costs being permanent 2) potential for NRZ to transfer subservicing away from OCN 3) Potential for large amount of uncompensated transfers to occur 4) Until today, covenant breach of SSTL and ramifications 5) Additional Fines 6) New SEC investigation 7) potential losses from new business ventures (growing originations, Dealer financing) 8 deterioration in MSR values Am I missing any risks? Anyone have any thoughts on the most likely way (or combination of ways) $550M in shareholders equity gets wiped out? Link to comment Share on other sites More sharing options...
cogitator8 Posted March 30, 2016 Share Posted March 30, 2016 I think in case of OCN, regulatory risk is the biggest risk, they are moving away from servicing to origination for a while and which is the right thing to do, as foreclosure are drastically going down. So question is that can they perform as well in mortgage origination business as well ! I don't have that knowledge about both businesses, so can't comment. But overall I see them doing what they say they will do and have lot of free cash flow, since their debt is half of what it used to be, they can plow ahead and get into new line of business, which is servicing and auto dealers financing. I think once regulatory problems are dealt with then stock will recover, nothing will happen before that. Link to comment Share on other sites More sharing options...
cogitator8 Posted March 30, 2016 Share Posted March 30, 2016 Scotsman guide will be out in few days, this will list top mortgage originators, BTW top lender are former officials of Countrywide, it is Deja Vu ! Link to comment Share on other sites More sharing options...
cogitator8 Posted May 17, 2016 Share Posted May 17, 2016 Baupost sold out of OCN ! Link to comment Share on other sites More sharing options...
gurpaul88 Posted February 23, 2017 Share Posted February 23, 2017 anyone still in this? Link to comment Share on other sites More sharing options...
physdude Posted February 25, 2017 Share Posted February 25, 2017 I still have a token amount having exited most of it at around 10 after taking a fairly big loss. I have used it mainly to continuously sell covered calls for which this is a pretty good security due to the high volatility. Link to comment Share on other sites More sharing options...
gurpaul88 Posted March 28, 2017 Share Posted March 28, 2017 https://www.streetinsider.com/Corporate+News/Ocwen+Financial+(OCN)+and+NY+DFS+End+Monitoring+Pursuant+to+2014+Consent+Order/12710716.html Link to comment Share on other sites More sharing options...
valcont Posted March 28, 2017 Share Posted March 28, 2017 https://www.streetinsider.com/Corporate+News/Ocwen+Financial+(OCN)+and+NY+DFS+End+Monitoring+Pursuant+to+2014+Consent+Order/12710716.html Popping a champagne tonite. My second largest holding. Looks like they'll be able to buy the MSRs in few weeks. But considering the recent interest rate jump, don't think there are any good deals. I am also watching WAC and if that implodes they may get some business. The monitoring costs were a big headwind. The stock should do well from now on. Link to comment Share on other sites More sharing options...
Guest roark33 Posted March 28, 2017 Share Posted March 28, 2017 Balance sheet still a mess, still the national monitor and I don't know who is selling MSRs currently, so not sure the bubbly is ready to flow over yet. Link to comment Share on other sites More sharing options...
JayGatsby Posted March 28, 2017 Share Posted March 28, 2017 Balance sheet still a mess, still the national monitor and I don't know who is selling MSRs currently, so not sure the bubbly is ready to flow over yet. What's wrong with the balance sheet? When the stock was sub $2 and they were saddled with close to $100m run-rate of monitor costs they had real balance sheet risk, but that risk has passed with the two settlements. You're right that the balance sheet will always be complicated because of the way they sell mortgages and retain the servicing (keeps them on balance sheet as a financing). When they get the warehouse line for ACS that should free up a chunk of cash ($40m at end of last quarter if I remember right). Still down on this one but the recent moves have helped . Think average cost is probably ~$8. Still below book so with the legal behind them hopefully it keeps moving up slowly. Link to comment Share on other sites More sharing options...
gurpaul88 Posted April 20, 2017 Share Posted April 20, 2017 http://nccob.gov/public/docs/News/Press%20Releases/OcwenOrder17_025.pdf Link to comment Share on other sites More sharing options...
valcont Posted April 20, 2017 Share Posted April 20, 2017 That was a bloodbath. This has been a bad year so far. I had 20% of my portfolio in this. Down 10% and out , add 3% of RTK losses and I am already down 13% this year. It'll be an embarrassing year end returns. Not worried about the CFPB suit but the NC charges are pretty bad , there is no way they'll settle escrow account irregularities. With NRZ down 13% today ,I am not sure how long they will put up with OCN.This is going into restructuring. Link to comment Share on other sites More sharing options...
Guest roark33 Posted April 20, 2017 Share Posted April 20, 2017 My question was why NRZ might suffer from this, if anything, they will just pick up the pieces and get all the MSRs....? ASPS is also screwed. Their non-ocwen stuff is worthless Link to comment Share on other sites More sharing options...
valcont Posted April 20, 2017 Share Posted April 20, 2017 My question was why NRZ might suffer from this, if anything, they will just pick up the pieces and get all the MSRs....? ASPS is also screwed. Their non-ocwen stuff is worthless OCN has subservicing rights to some of the MSRs that NRZ acquired from HLSS. If there is a rating downgrade then they may have to move the servicing. Who will service that portfolio cheaper than Ocwen? There is also some language in their 10K , that the bondholders have an option to terminate subservicer and servicers. Link to comment Share on other sites More sharing options...
morningstar Posted April 21, 2017 Share Posted April 21, 2017 My question was why NRZ might suffer from this, if anything, they will just pick up the pieces and get all the MSRs....? ASPS is also screwed. Their non-ocwen stuff is worthless OCN has subservicing rights to some of the MSRs that NRZ acquired from HLSS. If there is a rating downgrade then they may have to move the servicing. Who will service that portfolio cheaper than Ocwen? There is also some language in their 10K , that the bondholders have an option to terminate subservicer and servicers. There are also excess MSR arrangements and maybe other arrangements where NRZ has potential counterparty risk to OCN - either where, upon OCN's bankruptcy, the OCN estate would attempt to prevent NRZ from exercising its rights over assets that are legally owned by OCN, or where a trustee could replace OCN as master servicer, rendering excess MSRs held by NRZ worthless. Link to comment Share on other sites More sharing options...
Homestead31 Posted January 26, 2018 Share Posted January 26, 2018 been awhile here.... anyone want to dust this off? i'd be curious to hear fresh thoughts from anyone that might be taking a fresh look. i'm just getting started... Link to comment Share on other sites More sharing options...
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