Ocwen Opts for Delloite

On Sept. 4, Ocwen Financial Corp. (OCN - Analyst Report) said that its Board of Directors approved the dismissal of PricewaterhouseCoopers as its independent public accounting firm. The vote took place on Aug. 31 and the dismissal was effective the same day. It said there were no disagreements with PricewaterhouseCopers or reportable events.

In place of PricewaterhouseCoopers, Ocwen has hired Deloitte & Touche as its independent public accounting firm.

Ocwen and several other subprime lenders recently became subject of the Center for Public Integrity’s critical report. Records showed that 21 of the top 25 participants in a $21 billion federal program to bail out home borrowers were involved in the subprime crisis. Furthermore, Ocwen is undergoing about 64 lawsuits accusing it of abusive collection practices.

Ocwen is a financial services company engaged in the servicing of residential and commercial mortgage loans. It acquires mortgage-servicing rights for performing, sub-performing and non-performing residential mortgage loans, for which it earns fees like annual servicing fee and late fees. The company has been approved as a loan servicer by the Department of Housing and Urban Development, Freddie Mac (FRE) and Fannie Mae (FNM).

Last month, Ocwen completed its public offering of 32.2 million shares of common stock, receiving nearly $275.3 million in net proceeds. Its second-quarter profit of $17.6 million, or 26 cents per share, reported on Aug. 4, beat the Zacks Consensus Estimate on strong sales and cost-reduction initiatives. As such, we are maintaining our Outperform recommendation on the stock.

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