Chapman Buys Stake in Ocwen Saying It Could Double After ‘Panic’Zeke Faux
Ocwen Financial Corp., the mortgage servicer that plunged the most ever yesterday, could double after the “panic” from a dispute with California regulators subsides, said hedge-fund manager Robert Chapman.
“It’s going to stabilize,” said Chapman, adding that his Chapman Capital began buying Ocwen shares and call options late yesterday and increased its position today. “Ocwen easily could double from here.”
California’s Department of Business Oversight said yesterday that it may suspend the company’s license, which would force the firm to sell its mortgage-servicing rights in the state. The shares dropped 8.8 percent to $7.10 at 12:11 p.m. in New York, on top of yesterday’s 36 percent plunge.
Ocwen founder William Erbey agreed to step down as part of a $150 million settlement last month with New York regulators, who investigated the company over deals with related firms and potentially improper foreclosures. Ocwen also agreed to pay $2.1 billion in 2013 to settle with the Consumer Financial Protection Bureau.
“Once they signed the deal with New York, the scent of that gravy spread across the continent to Sacramento,” said Chapman, who declined to say how many shares and options his Manhattan Beach, California-based hedge fund has bought.
The California regulators said yesterday that Ocwen is ignoring requests for information, while the Atlanta-based company released a statement saying it recently turned over the data. A hearing with a state administrative law judge is scheduled for July.