One of the 10 largest shareholders of Home Loan Servicing Solutions (HLSS), Mangrove Partners, is following through on its threat to replace HLSS’ board of directors in an effort to force the company to end its relationship with Ocwen Financial (OCN).

Earlier this week, Mangrove, which disclosed that it owns more than 1.6 million of HLSS’ 71 million outstanding shares, accused the HLSS board of “dereliction of duty” and demanded that HLSS terminate its business relationship with Ocwen, which subservices all of the mortgage loans that HLSS holds servicing rights for.

In the letter to HLSS’ board, Mangrove also said that due to the board’s inaction and refusal to separate the company from Ocwen, it planned to nominate new board members to replace the existing board.

And now, Mangrove has done just that, stating that “wholesale board change” is necessary to protect HLSS’ shareholders.

"As we have previously explained to the board, we have serious concerns that this board is exposing HLSS shareholders to potentially significant value destruction through the company's continued relationship with Ocwen,” Mangrove’s founder and president, Nathaniel August, said.

“We believe that ending the company's relationship with Ocwen both protects shareholders from value destruction and moreover has the potential to generate significant additional value, ” August continued.

“Given the significant value destruction that shareholders are facing coupled with the value-creating opportunity this board appears intent on wasting, empty promises and ambiguous commitments are moot,” August said.

“That is why we are taking the extraordinary step of nominating a slate of five highly qualified independent nominees to the board who we believe will be committed to completing the strategic actions necessary to protect and enhance shareholder value at HLSS."

Included among the five prospective board members suggested by Mangrove is August himself. According to a release from Mangrove, August has “an extensive background in financial analysis and a broad understanding of the operational, financial and strategic issues facing public companies.”

August’s bio continues:

Prior to founding Mangrove Partners in April 2010, August was a director at White Eagle Partners, a global, value-oriented investment advisory firm, from 2008 to 2010. Previously he served as a senior analyst at Brahman Capital Partners, a long/short equity strategy hedge fund, from 2006 to 2008, an investment analyst at K Capital Partners, a private investment firm, from 2003 to 2006, and an analyst at Goldman Sachs in the Principal Investment Area from 2001 to 2003.

Mangrove’s other nominees (complete with their Mangrove-supplied bios) are:

Kevin Doyle - Doyle brings with him financial expertise, as well as a senior management background and legal, regulatory and governance experience obtained while serving as general counsel to a NYSE-listed financial services/insurance company. He currently serves on the Board of Directors of ACA Financial Guaranty Corporation, a diversified financial guaranty insurance company providing municipal bond insurance with a focus on marginal credits, and on the Board of Directors of Allianz Life Insurance Company of New York, a life and annuity insurance company.

John Dubel - Dubel is the chief executive officer of Dubel & Associates, LLC, a provider of restructuring and turnaround services to underperforming companies, which he founded in 1999. Through Dubel & Associates he served as the chief executive officer and member of the Board of Directors of FGIC Corporation, an insurance holding company, and Financial Guaranty Insurance Company, a monoline bond insurer, from 2008 to 2013, and as the sole independent member of the Board of Directors of Barneys New York, Inc., a national retail company, from February 2012 to May 2012 during their recapitalization. Dubel currently serves as the Chairman of the Board of Trustees of the ResCap Liquidating Trust, an entity set up to wind down the post-Chapter 11 assets of Residential Capital, LLC.

A. Jay Meyerson - Meyerson currently serves as an independent director on the Board of Directors of Ally Bank, a wholly owned subsidiary of Ally Financial Inc., He is also the owner of A. Jay Meyerson Consulting, a privately-owned management consulting firm specializing in financial services, bank merger acquisition and private equity investment evaluation. Prior to that, Meyerson served as the chief marketing officer of GMAC, which is now known as Ally Financial Inc., from 2007 to 2008. Previously, Meyerson served as the president and chief executive officer of Aames Investment Corporation, a mortgage real estate investment trust, from 1999 to 2004, and as its chairman of the board and chief executive officer from 2004 to 2006.

Amy Schumacher - Schumacher has extensive experience as a senior executive in the mortgage industry, including leading origination, servicing and capital markets organizations. She currently serves as the chief operating officer of Prospect Mortgage, a residential retail mortgage lender. Previously, she served in various capacities at Apollo Global Management, an alternative investment manager in private equity, credit-oriented capital markets and real estate with $160 billion in assets under management, from 2007 until 2012, which included the role of chief executive officer of Vantium Capital Inc., a de novo entity launched with Apollo to help lenders and investors optimize cash flow and resolve distressed mortgage debt.

In its previous letter to HLSS, Mangrove said that Ocwen’s recent series of legal and regulatory troubles are highly concerning. In December, Ocwen settled with the NYDFS over its servicing practices to the tune of $150 million. Then Ocwen settled with the state of California over Ocwen’s reluctance to provide documentation proving that it was allowed to operate in the state. 

“While our valuation work shows a range of potential values, we believe that a reasonable estimate of the value created by transferring the servicing rights would be between $8 and $13 per share of incremental value to HLSS,” Mangrove said in its previous letter. “Based on the company's book value on Sept. 30, 2014, this represents an increase in book value of between 44% and 72%.”

Mangrove states that if HLSS ends its association with Ocwen, it sees “no reason” that the HLSS’ stock would not return to its “historic” value. “In a reasonable scenario, this would give shareholders a value of between $31 and $40 per share,” Mangrove said.

HLSS closed Thursday at $16.29 per share.

“While we remain open to further discussion with the board and are amenable to reaching a mutually agreeable resolution that benefits all shareholders, we remain firm in our position on this matter — HLSS must terminate its relationship with Ocwen,” August said.

“If this board continues to refuse to take action, we look forward to presenting shareholders with what we believe will represent the far superior choice of leadership at the company's 2015 annual meeting."