Ocwen adds economies of scale as its PHH Mortgage acquisition closes
Ocwen is putting plans in place to realize $100 million in savings using resources from its acquisition of PHH Corp., which has just closed.
"We believe our increased size and scale will create both strategic and financial benefits," Phyllis Caldwell, chair of Ocwen Financial Corp.'s board of directors, said in a press release.
The company plans to realize the savings through "targeted cost synergies and improved economies of scale," according to Caldwell.
The combined company will service an estimated 1.7 million in loans with an unpaid principal balance of more than $296 billion.
With the closure of the transaction, former PHH Corp. CEO Glen Messina formally takes over the leadership of the company.
Ocwen will still have to satisfy several post-closing conditions set by the New York Department of Financial Services to maintain regulatory approval of the deal.
Many of the conditions revolve around ensuring the company follows through with the need to replace its embattled servicing system with vendor Black Knight's technology without disrupting borrowers.
Ocwen has had to address several legal and regulatory complaints over time, and one of its former executives was recently fined for insider trading.
A legal complaint against Ocwen related to robocalls has remained unresolved because, less than a week before the acquisition closed, a judge denied the terms of a settlement the plaintiffs had agreed to last year. The judge was concerned the $17.5 million payment was insufficient.
Ocwen is aware of the decision and reviewing the court order, according to a spokesman for the company.