Ocwen Financial (OCN) was nearly scuppered last week after the New York Department of Financial Services sent an open letter alleging it was backdating letters to borrowers, but the firm got a boost Wednesday afternoon on rumors reported initially by Bloomberg that it may settle the matter for about $40 million.
That sent Ocwen’s stock tumbling last week.
Bloomberg reported that rather than the “potentially hundreds of thousands” initially alleged in the letter from NYDFS superintendent Benjamin Lawsky, it was probably more like between 4,200 to 73,200.
Should Ocwen settle, Height Analytics analyst Edwin Groshans told Bloomberg that $40 million is a "reasonable expectation to start with."
Ocwen was up more than 6% on the day after word broke.
After the allegations on Oct. 21, Ocwen responded with an open letter of apology, stating the errors were software related and that it would take steps to rectify the situation.
Ocwen will report its third quarter earnings before market open Thursday and host its conference at 11 a.m. EST.