Ocwen Negotiating With Lenders

Ocwen Financial Corp. disclosed Monday that it is negotiating with lenders to extend and refinance some of its debt.

In a regulatory filing, the embattled mortgage-servicing company said it looking to renew, replace or extend debt arrangements that mature or begin amortization this year. The company said it is also considering selling and financing advance receivables.

The company warned if it is unable able to change the debt arrangements, it could face a liquidity crunch.

"Due to the significant level of cash requirements related to servicing advances, we may not have sufficient levels of liquidity to fund the operations without our advance financing facilities," the company said in the filing.

Ocwen has been plagued by regulatory problems and other challenges for the past two years, including a December settlement with New York state regulators over alleged improper servicing practices for distressed borrowers. The company had delayed filing its 10-K over problems related to the financial status of its Home Loan Servicing Solutions Ltd. affiliate, which had put it in jeopardy of having its shares delisted from the New York Stock Exchange.

The company is trying to cut its risk exposure by selling off servicing rights for mortgages owned by government-supported Fannie Mae and Freddie Mac.

Earlier this month, the company said it had avoided a "going concern" opinion from its auditor that could have raised questions about the company's ability to survive—a move that Ocwen said indicates it is on the rebound.

Write to Chelsey Dulaney at [e-mail]

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