NEW YORK (TheStreet) -- Shares of Ocwen Financial Corp. (OCN) are down 7.43% to $20.94 after it was reported that the company won't buy the rights to service $39 billion in mortgages for Wells Fargo & Co. (WFC) , officially terminating a deal that New York's financial regulator had put on hold, the Wall Street Journal reports.
Wells Fargo said yesterday that the firms had "mutually decided" to cancel the deal, the Journal reported, adding that Wells Fargo said that the transaction is unlikely to have a material effect on financial results.
Wells Fargo first announced in January it would sell the rights to Ocwen, the Journal said, and that shortly after that the office of Benjamin Lawsky, the superintendent of New York's Department of Financial Services, halted the transaction.
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Lawsky expressed concerns about Ocwen's ability to handle additional loan volume and later raised additional questions about Ocwen's business practices, according to the Journal.
TheStreet Ratings team rates OCWEN FINANCIAL CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OCWEN FINANCIAL CORP (OCN) a HOLD. The primary factors that have impacted our rating are mixed--some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."