Weeks ahead of the anticipated release of Ocwen's fourth-quarter earnings report, CEO Ron Faris has issued a notice that the company expects to see a loss based on mounting regulatory pressures, expenses, and a recent ratings downgrade by a major credit ratings agency. In a note to stakeholders released Thursday, Faris reviewed a handful of the regulatory hurdles Ocwen has had to deal with in the past year, including a long-running investigation from New York's top financial regulator that eventually resulted in a $150 million settlement.
The company plans to take an additional $50 million charge to its Q4 expenses as a result of that agreement after already setting aside $100 million in Q3. Faris' letter came one day after Fitch Ratings announced a downgrade to Ocwen's primary, master, and special servicer ratings, citing "weaknesses in Ocwen's corporate governance and operational control framework" and pointing specifically to some of the last year's regulatory issues.
The latest National Association of Homebuilders/First American Leading Markets Index released Thursday found that markets in 63 out of 351 metropolitan areas nationwide matched or exceeded their normal levels of economic and housing activity in the fourth quarter of 2014, according to an announcement from NAHB. The national index posted a reading of .90, meaning housing and economic activity in the U.S. is 90 percent of the way back to its pre-crisis level.