The calendar may say that it’s officially spring, but Ocwen Financial’s (OCN) winter of discontent is nowhere close to being over.

The embattled nonbank is now facing delisting from the New York Stock Exchange after receiving a deficiency letter from the stock exchange, which said that Ocwen’s failure to timely file its 2014 annual report places the nonbank in violation of the NYSE’s continued listing standards.

Last week, Ocwen announced that it was delaying the release of its 2014 annual report for the second time. At the time, Ocwen said that it planned to filed its annual report “on or before March 23,” but the company failed to meet its own deadline.

Now, because of those delays, the company is facing the prospect of having its stock removed from the NYSE.

According to Ocwen, the company will now become subject to a series of procedures set forth in the NYSE regulations. The NYSE regulatory arm, called NYSE Regulation, will “closely monitor” the status of Ocwen’s late filing and related public disclosures for up to six months.

If Ocwen fails to file its annual report in that six-month period, the NYSE may, at its discretion, suspend and delist Ocwen’s stock at any point. On the other hand, the NYSE may allow Ocwen’s stock to trade for an additional six months after the initial monitoring period expires if it deems it prudent, but still cautions that the stock could be delisted during that additional six-month period.

And if “circumstances warrant,” the NYSE could commence delisting proceedings on Ocwen at any time during the next 12 months.

The cause for the delay in Ocwen’s annual report is Ocwen associate Home Loan Servicing Solutions (HLSS) and its ability to fund new servicing advances.

According to a recent filing with the Securities and Exchange Commission, Ocwen “continues to analyze and review” HLSS’ ability to fund servicing advances, adding that “a failure by HLSS to fund new serving advances could have a material negative impact on the company's financial condition.”

In a new SEC filing, Ocwen said that the company now requires additional time to prepare information related to its ability to operate as a going concern based on the issues with HLSS.

Because of those issues, Ocwen is now no longer able to provide an expected date for the filing of its annual report.

And in the new SEC filing, Ocwen shared more detail about the issues at HLSS.

According to the SEC filing, HLSS acquired mortgage servicing rights and the related servicing advances and uses Ocwen Loan Servicing to subservice the loans, with Ocwen remaining the named servicer on the loans.

Under the agreement with Ocwen, HLSS is required to fund new servicing advances for the subject MSRs.

Therefore, Ocwen is “dependent” upon HLSS for financing of the servicing advance obligations for MSRs where Ocwen is the named servicer because Ocwen is contractually required under its servicing agreements to make the relevant servicing advances even if HLSS does not, the company said in its SEC filing.

According to the filing, Ocwen is the named servicer for $160.8 billion in unpaid principal balance of HLSS-owned MSRs, and as of December 31, 2014, the associated outstanding servicing advances on those MSRs were approximately $6.1 billion.

“(Ocwen) believes that HLSS is dependent upon its own advance financing facilities in order to fund a substantial portion of the servicing advances that it is contractually obligated to make pursuant to our agreements with them,” Ocwen said in its filing.

Currently, some servicing advances from HLSS are on hold after hedge fund BlueMountain Capital Management sent notices of default to Ocwen and HLSS, saying that Ocwen’s regulatory troubles have caused an “irrefutable” default on notes the hedge fund holds in connection with the HLSS Servicer Advance Receivables Trust.

In February, HLSS announced that it reached an agreement with Deutsche Bank National Trust Company stating that the trustee will “not commence a judicial proceeding to obtain judicial guidance on the merits, if any, of the BlueMountain allegations.”

The agreement also stated that in exchange for not commencing any legal proceedings, Deutsche Bank National Trust Company will “withhold certain excess funds that would otherwise be distributable from the HSART Trust to HLSS Holdings.”

Both Ocwen and HLSS said that they planned “vigorously defend” themselves against the default claims, but the BlueMountain fight is now affecting the servicing advances.

“While (Ocwen) has vigorously defended itself against these allegations, the company has consented to an arrangement between HLSS and the indenture trustee for those notes that provides for a standstill for the indenture trustee to investigate the allegations of the default during which the indenture trustee will not initiate a court proceeding,” Ocwen stated in its latest SEC filing.

“If the eventual outcome of this matter were to involve an event of default being declared under this advance financing facility, this advance financing facility may fail to perform as envisaged,” Ocwen continued. “The company currently does not have any committed or executed financing arrangements to provide for funding the ongoing advances assumed by HLSS, and the company cannot provide any assurances that such financing would be available, or if available, could be obtained at terms and conditions acceptable to the company, if the need arose.”

HLSS also delayed the release of its annual report recently, saying in a SEC filing that it needs more time to demonstrate “its ability to operate as a going concern” to its auditors.

HLSS’ delay in filing its annual report also earned it a delisting warning from Nasdaq, which notified HLSS last week that the delay in filing its annual report places it in noncompliance with Nasdaq’s rules.

In a note to clients, Compass Point Research and Trading said that it expects the market to react negatively to the latest round of Ocwen news, saying that the latest filing delay “adds further uncertainty” about the company’s performance and future prospects and expects Ocwen’s disclosure that it is evaluating its ability to operate as a going concern to increase investor concern.

Ocwen’s stock closed Wednesday unchanged from where it opened, at $8.80. For the year, the stock is down more than 41%.

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