Ocwen Financial Corp. fired Otto Kumbar, executive vice president of lending, as the company significantly reduces its origination business.
The move was disclosed in a Securities and Exchange Commission filing on Feb. 12 that stated Kumbar's job was eliminated as a result of Ocwen's "strategic assessment of its lending business." His last day of work was Feb. 9.
In October, Ocwen entered into an agreement to sell its wholesale lending business to a still-to-be disclosed purchaser and followed that up by saying it is considering exiting the reverse mortgage field.
Ocwen previously exited the correspondent aggregator channel. It would be primarily a forward retail originator in the future if all these moves come to fruition.
Kumbar also had the title of president and CEO of Ocwen Mortgage Servicing. Ocwen is in the process of selling its mortgage servicing rights portfolio to New Residential. There is an agreement for Ocwen to subservice the loans.
He will receive $1.25 million in severance pay, according to an agreement attached to the filing. Kumbar is surrendering his 1,000 preferred shares of Ocwen Mortgage Servicing stock.
The agreement specifically allows Kumbar to establish a mortgage brokerage but there is a two-year restriction on recruiting Ocwen employees as well as taking "any action that would interfere with, diminish or impair the valuable relationships that the company has with its clients, customers and others with which the company has business relationships or to which services are rendered."
In November 2014, Ocwen's former chairman, William Erbey, took Kumbar from his job as head of Liberty Home Equity Solutions, its reverse mortgage unit, to run the origination business and to create a call center operation.
At the time, Erbey said Kumbar's main task was to generate $2 billion in loans a month.
In the third quarter of 2016, Ocwen originated $541.2 million in loans, down from $1.2 billion one year prior.
"We are grateful to Mr. Kumbar for his contributions and service throughout his time with the company and we wish him well in his future endeavors," said John Lovallo, a spokesman for Ocwen in an emailed statement. "John Kim, who joined Ocwen Mortgage Servicing in 2013, has been named to a new management role as president of OMS. Michael Kent will remain resident of Liberty Home Equity Solutions and will continue to focus on growing Liberty’s retail and wholesale channels."
"Ocwen remains fully committed to the company's lending platform and will continue to invest to meet the needs of our customers and partners with best-in-class service and support."