Mortgage servicing giant Ocwen Financial is leaning on outside PR and IR support after New York State's Dept. of Financial Services said it uncovered "serious issues" with the company, including backdating of letters to borrowers about loan modifications and foreclosures.
Ocwen CEO Ron Farris responded to the DFS’ Oct. 21 public release of its letter (PDF) outlining its concerns with an open apology letter on Oct. 24 (PDF) to homeowners. "Having potentially caused inadvertent harm to struggling borrowers is particularly painful to us because we work so hard to help them keep their homes and improve their financial situations," the company said. "We recognize our mistake. We are doing everything in our power to make things right for any borrowers who were harmed as a result of misdated letters and to ensure that this does not happen again."
Ocwen, which had 2013 revenue of $2B, saw its shares take a beating on Wall Street after the DFS went public with its warnings last week.
Sard Verbinnen & Co.'s New York office – principal Margaret Popper and VP David Millar -- is advising Atlanta-based Ocwen and handling media relations. ICR is Ocwen’s outside IR firm, led by managing director Stephen Swett and partner Brad Cohen.
Reuters reported that Ocwen’s initial statement said 283 New York borrowers received letters with erroneous dates, but the company amended the statement later in the day to say it was aware of others but didn’t know how many.
New York DFS Superintendent Benjamin Lawsky said "in many cases" borrowers were given 30 days from the date of loan modification letters but didn’t receive the letters until the 30 days had already lapsed. Other letters giving borrowers a date to cure a default and avoid foreclosure were received months after the cure date, Lawsky said.
Ocwen has pledged to hire an independent firm to investigate the claims. Farris also promised “further communication” with borrowers on the matter.
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