- By Jeff Ostrowski Palm Beach Post Staff Writer
In a marriage of struggling mortgage companies, Ocwen Financial of West Palm Beach said Tuesday that it will pay $360 million for PHH Corp. of Mount Laurel, New Jersey.
The companies share a common disdain for the federal Consumer Financial Protection Bureau: After the agency imposed hefty fines, both filed suits calling the regulatory body unconstitutional.
They also have red ink in common. PHH reported losses of $202 million in 2016 and $217 million in 2017. Ocwen lost $189 million in the first nine months of 2016 and $83 million in the first nine months of 2017.
“We are very pleased to announce the proposed acquisition of PHH, a leading non-bank servicer,” Ocwen Chief Executive Ron Faris said in a statement. “PHH is a high-quality servicer with complementary capabilities and business lines to Ocwen, making it a great strategic match for us.”
Ocwen said its bid represents a 35 percent discount to PHH’s Dec. 31 price.
PHH was facing federal regulatory action regarding alleged violations of the Real Estate Settlement Procedures Act. Ocwen, for its part was slapped by the CFPB for alleged incompetence.
“The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes,” the CFPB said. “Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”
The CFPB, created under President Barack Obama, has lost influence under President Donald Trump.