Onity Group
| Company type | Public |
|---|---|
| Industry | Mortgage loan servicing, asset management |
| Predecessor | Ocwen |
| Founded | 1988 |
| Founder | William Erbey |
| Headquarters | West Palm Beach, Florida , United States |
Area served | United States (all 50 states, District of Columbia, two U.S. territories), Philippines, India |
Key people | Glen A. Messina (President and CEO) |
| Products | Residential and commercial mortgage loan servicing, special servicing, asset management |
Number of employees | 6400 (2018) |
Onity Group, previously known as Ocwen, is a publicly traded firm focused on servicing residential and commercial mortgage loans, special servicing, and asset management. Established in 1988 and based in West Palm Beach, Florida, Onity maintains additional offices in Mount Laurel, NJ, Rancho Cordova, California, and St. Croix, U.S. Virgin Islands, along with support centers located in the Philippines and India. On June 10, 2024, Ocwen rebranded itself as Onity Group, adopting the tagline "We Get It Done."
Corporate affairs
Onity holds licenses to service mortgage loans throughout all 50 states, the District of Columbia, and two U.S. territories. The company has been providing residential mortgage servicing since its inception in 1988 and expanded into subprime servicing beginning in 1994.
By 2010, Ocwen's portfolio of subprime servicing had grown to $56 billion, placing it fourth in the industry behind American Home Servicing ($78 billion), Bank of America/Countrywide ($82 billion), and Chase Home Finance ($90 billion). As of December 31, 2011, Onity managed 671,623 residential loans with an unpaid principal balance (UPB) totaling $102.2 billion. By February 26, 2014, its mortgage portfolio surpassed $500 billion UPB, positioning it as the largest non-bank servicer of U.S. mortgages.
Acquisitions
In June 2013, Ocwen Financial (OCN), recognized as the fourth-largest mortgage servicer nationwide, acquired servicing rights for $78 billion in mortgages from OneWest Bank, formerly known as IndyMac Bancorp.
In September 2010, Ocwen Loan Servicing, LLC (OLS), a fully owned subsidiary, purchased the U.S. non-prime mortgage servicing operations of Barclays Bank PLC, branded as HomEq servicing. This transaction included mortgage servicing rights (MSRs), servicer advances, and operational platforms based in Sacramento and Raleigh for $1.2 billion. It added roughly 134,000 residential loans with a $22.4 billion unpaid principal balance (UPB).
In September 2011, Ocwen acquired outstanding partnership stakes in Litton Loan Servicing LP along with certain interest-only servicing securities from Goldman Sachs for $247.2 million. This acquisition elevated Ocwen to the largest subprime mortgage servicer in the United States by expanding its portfolio by 245,000 loans with a $38.6 billion UPB. Litton Loan Servicing had previously been subject to a consent order regarding its loan servicing operations.
In April 2012, Ocwen purchased approximately $22 billion in mortgage servicing rights from Saxon Mortgage Services, a division of Morgan Stanley that had also been under federal regulatory consent orders.
In June 2012, Ocwen completed the acquisition of commercial servicing rights portfolios from Aurora Bank.
In October 2012, Ocwen announced its intention to acquire Homeward Residential Holdings, Inc. from WL Ross & Co. for $750 million; this deal was finalized on December 27, 2012. Following the acquisition, Homeward's Jacksonville facility was closed and layoffs affected 695 employees across two locations.
Also during October 2012, Ocwen collaborated with Walter Investment Management Corp. to secure a $3 billion bankruptcy auction win for Residential Capital's mortgage-servicing and origination assets. Concurrently, Ocwen agreed to purchase Genworth Financial Home Equity Access Inc. for $22 million.
In February 2013, Gleacher & Co. divested its mortgage division ClearPoint to Ocwen.
On February 27, 2018, Ocwen entered into a definitive agreement to acquire PHH Corporation for $360 million; the acquisition was completed on October 4, 2018. Glen A. Messina was appointed President and CEO and joined Ocwen's board following this transaction.
Ocwen's Status Following Merger with PHH Mortgage
On June 6, 2019, Ocwen Financial Corporation integrated all loans managed by Ocwen Loan Servicing into PHH Mortgage. This consolidation broadened the scope of services offered by both entities, as PHH Mortgage specializes in originating new mortgages and refinancing, whereas Ocwen had previously concentrated exclusively on loan servicing.
Prior to this, on October 4, 2018, Ocwen Financial finalized its acquisition of PHH Corporation, thereby making PHH a fully owned subsidiary under Ocwen Financial Corp.
Participation in the Home Affordable Modification Program
Ocwen is an active participant in the U.S. Treasury Department's Home Affordable Modification Program (HAMP), which is designed to assist homeowners in avoiding foreclosure through loan modification initiatives. The company achieved early success by converting trial modifications into permanent ones using verified borrower income data instead of relying on stated income.
In August 2010, Ocwen launched the Shared Appreciation Modification (SAM) program, which lowered delinquent borrowers' principal balances to 95% of their current home value while requiring a 25% share of any future appreciation upon sale or refinancing. By 2011, Ocwen reported having modified more than 200,000 distressed loans dating back to the mortgage crisis of the mid-2000s.
Altisource Spin-Off
In August 2009, Ocwen separated its Ocwen Solutions (OS) division into a distinct publicly traded entity named Altisource (). This strategic move enabled Ocwen to concentrate on its primary loan servicing operations and better navigate market challenges.
The OS segment comprised unsecured debt collections, residential fee-based loan processing services, technology platforms, international commercial loan servicing through Global Servicing Solutions (GSS), and equity stakes in BMS Holdings. Apart from interests in GSS and BMS Holdings, all other OS assets and operations were transferred to Altisource, which focuses on Real Estate Owned (REO) services.
Home Loan Servicing Solutions Spin-Off
In 2010, Ocwen Financial Corporation spun off Home Loan Servicing Solutions (HLSS), an entity founded by Ocwen's Executive Chairman William Erbey. HLSS was created to acquire mortgage servicing assets including servicing rights and associated fee income.
HLSS announced plans for an initial public offering in February 2011 and successfully raised $186.2 million through its IPO in February 2012. The company is publicly traded on NASDAQ.
Workforce
As of September 30, 2018, Ocwen employed approximately 6,400 individuals worldwide, with about 4,300 based in India and 500 located in the Philippines. These offshore centers mainly support loan servicing and corporate functions, with more than 80% dedicated to loan servicing activities.
Legal Issues
In July 2002, attorney Kweku Hanson initiated a class-action lawsuit against Ocwen Federal FSB alleging improper late fees and charges. The lawsuit sought damages totaling $1.5 billion but was ultimately resolved through an out-of-court settlement for an undisclosed sum.
On December 19, 2013, California Attorney General Kamala D. Harris announced a $2.1 billion mortgage settlement with Ocwen Financial Corporation addressing mortgage servicing violations. The agreement involved participation from 49 states and allocated $2 billion toward loan modifications and principal reductions for homeowners affected between 2009 and 2012. California borrowers were eligible for roughly $268 million in principal reductions along with nearly $23 million in direct payments.
The Consumer Financial Protection Bureau criticized Ocwen for taking advantage of borrowers during this period. As part of the settlement terms, founder William Erbey stepped down from the board due to conflicts of interest and received $1.2 million from Ocwen.