Standard & Poor's Ratings Services announced today that its "above average" residential subprime, special, and subordinate-lien rankings on Ocwen Loan Servicing (OCN) are not immediately affected by the company's statement that it will be purchasing Homeward Residential.
The sale will cost Ocwen $588 million in cash and $162 million in Ocwen convertible preferred stock. This purchase is expected to be complete by the end of 2012. Homeward Residential has serviced around 400,000 accounts as of this June, which will significantly increase the number of accounts serviced by Ocwen. As of the end of September of this year, Ocwen has serviced 789,000 loans.
Ocwen, this year has been acquiring mortgage servicing from big banks in hopes to shrink their portfolios and adjust to new rules. Ron Faris, the CEO of Ocwen said, "The settlement pushed banks to find partners to help, and we have kept pace with these developments to adhere to these requirements. The settlement will expand to other banks."
Ocwen's Executive Chairman William Erbey said, ()