Mortgage Servicer Ocwen Eyes Other Consumer Debt

NEW YORK (TheStreet) --Ocwen Financial (OCN)one of the nation's largest collectors of mortgage debt, is considering branching out into other types of consumer debt collection.

"That's something that we are looking because we're generating substantial amount of excess cash flow in Ocwen," Chairman Bill Erbey told TheStreet during one of several interviews for this profile published Wednesday. "We haven't told anybody publicly what that would be," he added.

Investor Wilbur Ross, who sits on Ocwen's board of directors, believes such an expansion would be a natural fit.

"When you think about what the skill sets are, it's managing very complex interactions with consumers under very stressful circumstances, mainly default, and doing it with a lot of, I don't want to say entry level, but almost entry level people, and doing it on a vast scale, and along the way managing that process in two continents, mainly the Americas and India. So those are skill sets that are pretty rare, and pretty valuable. There are all sorts of other consumer debt instruments that I have no doubt that they could service. So even if something were to go slow with mortgage servicing, I think there are plenty of other opportunities. Consumer's finance is not going to go away, and there aren't that many people that are good at it," Ross says.

Ocwen reported third quarter earnings Thursday, though the issue did not come up on a conference call with analysts and investors.

Rick Biggs, partner at New York-based hedge fund Consector Capital, which owns Ocwen shares, sees an opening for Ocwen in consumer debt collection. He says Portfolio Recovery Associates, Inc.   (PRAA) and Encore Capital Group  (ECPG) "are the best and at this point almost the only real solid operators so there is room I think for a little more competition" in the consumer debt collection industry.

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