Financial Sector Hurricane Eye: Ocwen Financial Corp (OCN)

Shares of Ocwen Financial Corp. (OCN) dropped near 17% on Friday, after BlueMountain Capital Management, LLC indicated that OCN’s recent regulatory troubles have caused an “irrefutable” default on certain Series 2012-T2 and Series 2013-T3 Notes the hedge fund owns, issued (the notes) by OCN’s affiliated company Home Loan Servicing Solutions, Ltd. (HLSS) in connection with the HLSS Servicer Advance Receivables Trust.

BlueMountain Capital also disclosed that it holds a short position in, and put options with respect to, the common stock of both companies, OCN and HLSS. The price of HLSS stock tumbled more than 10% on the last trading session.

After the closing bell on the same day, the California Department of Business Oversigh (DBO) announced a $2.5 million settlement with OCN’s unit Ocwen Loan Servicing, LLC over the firm’s failure for more than a year to provide loan information needed by the DBO to assess OCN’s compliance with state mortgage lending laws.

Under the consent order agreement, the DBO will select an independent, third-party auditor, paid for by OCN, whose duties will include ensuring OCN provides the DBO all the information it has requested from loan files. OCN also will pay $2.5 million in penalties and cover the DBO’s administrative costs associated with the case

The settlement also prohibits OCN from taking on any new California customers until the DBO determines the firm can fully respond in a timely manner to future requests for information, and the DBO will drop its effort to suspend OCN’s license to operate in California. Filed Oct. 3, 2014, the formal accusation grew out of OCN’s conduct during a routine regulatory examination and will now be withdrawn.

Had OCN lost its mortgage license in California, the sanction would impact 378,132 loans that the company services in the state. Those loans currently carry a unpaid principal balance (UPB) of $95 billion or roughly 23% of OCN’s total UPB due, according to analyst estimates.

The DBO retains the ability to pursue an enforcement action against OCN should the examination of the loan files uncover substantive violations of laws designed to protect mortgage loan consumers

As after hours trading closed up, OCN stock pushed above $8.00, following the DBO settlement announcement.

OCN is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of mortgage loans.

More about at Ocwen Financial Corp. (OCN) at www.ocwen.com

HLSS is an internally-managed owner of residential mortgage assets with historically stable valuations and cash flows.

More about at Home Loan Servicing Solutions, Ltd. (HLSS) at www.hlss.com

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FXCM Inc. (FXCM) reported an update on its business, highlighted by strong operating metrics.

FXCM said that, through Thursday, January 22, FXCM's month-to-date retail customer trading volume, which includes all retail FX and CFD volume, is $406 billion* with 30% coming from the last 5 days alone, which included a U.S. bank holiday. Average retail customer trading volume per day during this period is $27 billion.* As of January 22, tradable accounts were 224,547, and client equity was $1 billion.

* Amount excludes volume generated by clients with negative balances following the Swiss National Bank's decision to abandon the maximum exchange rate of 1.2 Swiss Francs per Euro.

A week ago, the Swiss National Bank ended a three-year-old cap of 1.20 franc (CHF) per euro. The move sent currency markets into turmoil and resulted in heavy losses for numerous currency brokers.

Swiss National Bank's decision left FXCM with a negative equity balance of about $225 million. FXCM reached a critical financing agreement with Leucadia National Corporation for $300 million, in a senior-secured term loan with a two-year maturity and an initial coupon of 10%.

According to FXCM, the company continues to operate in the normal course of business and all of its entities have capital in excess of regulatory requirements. The financing FXCM received from Leucadia has strengthened its balance sheet and gives the company the opportunity to grow its core business while reducing its debt through the sale of non-core assets. FXCM anticipates that, with the proceeds from these sales and continued earnings, it can meet both near and long term obligations of its financing, while preserving the strength of its franchise

FXCM is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide.

More about FXCM Inc. (FXCM) at www.fxcm.com

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Crown Equity Holdings Inc. (CRWE) provides marketing solutions that boost customer awareness and merchant visibility on the Internet. The company is currently developing its CRWE Network ( www.CRWE-PR.com ) , a growing network of community targeted sites.

It has recently included the City of Sunnyvale, CA ( www.sunnyvale.crwe-pr.com ) into the CRWE Network.

Sunnyvale is located in Santa Clara County, California, 40 miles southeast of San Francisco, in the heart of the Silicon Valley. Some of the nation’s most successful business and industrial leaders are located in Sunnyvale, including AMD, Network Appliance and Yahoo!.

The City of Sunnyvale had an estimated population in 2013 (U.S. Census Bureau) of 147,559, and represents an important marketplace for the CRWE Network, which business model is based on selling advertising to businesses targeting both locally and nationally

The CRWE Network has reached the 1487th community website in the U.S. , associated with 3456 ZIP Codes, and includes coverage in the states of California, Mississippi, Michigan, Florida, Nevada and New York, as well as across 10 provinces in Canada.



Online video is gaining strength as a source for content marketing. Strategic plans are being developed for CRWE’s division CRWE Tube ( www.crwetube.com ) to improve the potential future growth for the company.

More about Crown Equity Holdings Inc. (CRWE) at www.crownequityholdings.com

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