Ocwen Financial (NYSE:OCN) shares gained Monday after the mortgage servicing firm sent a letter of rebuttal to trustees and master servicers of 119 residential mortgage-backed securities (RMBS) trusts, in response to recent charges of non-performance. OCN is in the lower half of the 52-week range of $5.66 to $40.44 on volume of 2.2 million shares. Average daily volume is 9.5 million shares.
OCN said at the core of the dispute is that some RMBS investors, including BlackRock Financial Management, Pacific Investment Management (PIMCO), Kore Advisors, Metropolitan Life, and Neuberger Berman Europe want OCN to take a more-aggressive stance on home forecloses and loan modifications.
In a public rebuttal letter, OCN said it is working with the U.S.Treasury Department to help struggling borrowers remain in their homes by pursuing profitable loan modifications rather than “rushing to foreclosure.”
OCN said the RMBS “investors’ pro-foreclosure, anti-modification agenda is driven by their desire to increase their own financial returns on their specific tranche-level holdings in RMBS trusts, at the expense of long-term gains to the trusts as whole.”