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New York

With possible lawsuit looming, Ocwen stumbles in bond sale

Mortgage servicer's debt offering fails to raise expected amount

Ocwen's Ronald Faris
Ocwen's Ronald Faris

Atlanta-based mortgage service Ocwen Financial Corp. did not fare as well as underwriters had hoped in a new debt offering. Nearly $124 million was raised from the sale of bonds affiliated with fees from managing government-backed mortgages. Underwriters projected funds would be closer to $136 million. Mortgage-servicing rights secure the notes.

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“Servicing is an expensive business where companies that try to cut costs may find themselves in regulatory hot water,” policy analyst Jaret Seiberg of Guggenheim Securities LLC’s Washington Research Group said, as Bloomberg News reported.

BlackRock and Pimco have been mulling filing a lawsuit against Ocwen for allegedly improperly handling residential mortgages, as previously reported. [Bloomberg News] — Mark Maurer

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