Last year, Ocwen Financial initiated a significant shift in its business, moving away from mortgage lending and eliminating several of its lending channels.
Now, that shift has cost Otto Kumbar his job.
Kumbar was, until last week, Ocwen’s executive vice president of lending, but Ocwen disclosed Monday that Kumbar’s position was eliminated “in connection with the company’s previously disclosed strategic assessment of its lending business.”
According to a filing with the Securities and Exchange Commission, Kumbar’s last day with Ocwen was Friday, Feb. 9, 2018.
But Kumbar isn’t leaving Ocwen empty-handed. According to the SEC filing, Kumbar will receive a payment of $1.25 million as part of his separation agreement with the company.
In exchange for the $1.25 million payout, Kumbar has to agree to various stipulations, including being prohibited from “any action that would interfere with, diminish or impair the valuable relationships that the company has with its clients, customers and others with which the company has business relationships or to which services are rendered.”
Kumbar is also not permitted to “recruit or otherwise solicit for employment or induce to terminate the company’s employment of or consultancy with, any person (natural or otherwise) who is an employee of the company, or hire any such employee” for two years.
But Kumbar is specifically not prohibited from establishing a mortgage broker of his own.
As stated above, Kumbar’s departure comes as Ocwen is dramatically shifting its mortgage presence.
Back in August 2017, Ocwen revealed that it planned to exit correspondent lending to focus on its “higher margin” channels – retail and wholesale.
The company’s focus on wholesale lending ended up on lasting two months, because Ocwen disclosed in October that it planned to exit its wholesale forward lending business, thereby shutting down its largest mortgage origination channel.
Just a few days later, Ocwen said that it is considering selling its reverse mortgage business. If that sale does eventually go through, Ocwen would have reduced its six mortgage originations lines of business down to one – eliminating correspondent and wholesale in both forward and reverse mortgage lending, and retail reverse mortgage lending.
That would leave mortgage servicing and retail forward lending as the company’s only active mortgage lines of business.
And now, the EVP that led its lending business is gone, too.