OCWEN Allison Bendersky

June 23, 2013

OCWEN’s Organizational Behavior

• Current and proposed leader values• Ethics, Change, Innovation

• Personality• Type A versus Type B’s

• Appropriate and proven decision-making abilities• Testing for abilities through the wonderlic and the personality index test

• Expertise• Dependent on area of work.

OCWEN Background

• What is OCWEN?• According to the OCWEN Website, OCWEN’s main is primarily in the business of “…

servicing high-risk loans. Ocwen works with customers in a variety of ways to make their loans worth more, including purchasing of mortgage servicing rights, sub-servicing, special servicing and stand-by servicing. We can also support companies that wish to utilize our best-in-class technology and know-how to support improvements in their own operations…”(Ocwen, 2012).

• When and why did the company come into existence?• According to the Company’s website, the company has been in existence for over 20

years with its diverse practices that allow its users to “…increase(s) borrower acceptance of and compliance with loan resolutions…”(Ocwen, 2012).

• OCWEN was founded in 1988 (EquityBites, 2013).

OCWEN Today

• Executive Offices are based in Atlanta, Georgia (Ocwen, Walter Investment 2012)

• Additional offices in West Palm Beach and Orlando, Florida; Houston, Texas; St. Croix, the United States Virgin Islands; and Washington, DC (Ocwen, Walter Investment 2012)

• Call Center operations in India and Uruguay. (Ocwen, Walter Investment 2012)

• The Company has numerous offshoots• One such is the AltiSource Residential Corp. based in Atlanta.

OCWEN’S Portfolio of Services

• Handling troubled loans• Will only continue to enable OCWEN to be in further hot water as

further loans go into default.

• As the company continues to buy underperforming portfolios, they will answer for the errors of others.

What is OCWEN’S Current Management Style?

• The current management style at OCWEN is a lean management style with little creativity allowed and the stiflingly of change.• Contrary to the image portrayed in interviews and orientation.

• The company also acquires entities and then cuts large amounts of employees after denying layoffs.• Latest company facing layoffs is OneWest Bank in Austin, TX with

WARN letters set for August 31, 2013 for over 700 employees (Hawkins, L., 2013)

How Management Can Change OCWEN?

• 1. Listen to the staff on improvement of training and procedures.• Gaps have been found by the State of New York and therefore,

measures have been taken to ensure safeguards are in place.

• "Following complaints about OCWEN's servicing practices, we conducted a targeted exam of OCWEN's performance and discovered gaps in the company's compliance," Lawsky said in news release. "The department is requiring the company to hire a monitor so that we can be sure that the reforms are implemented and homeowners have a real chance to avoid foreclosure.“ (Browdie, B., 2012).

How Management Can Change OCWEN?

• 2. Learn to care about something beyond the profits that management receives dividends payouts on a quarterly basis.• Currently the owners each have the largest amount of shares held

by anyone making them the strongest and most likely to be taken out if the company performs weakly.

How Management Can Change OCWEN?

• 3. Listen to the Staff’s feedback in the exit interviews.• The turnover in most departments at OCWEN are quite high due to the

long hours, low pay, and unappreciative nature of the management.

• Staff members who are salaried are expected to work beyond a 50 hour work week and frowned upon if they do not work on weekends.

• Look at restructuring the bonus structures to be more fair and equal for all employees.

• Bonuses are only structured for salaried customer service or for management based positions.

• Hourly based employees do not qualify for such incentives.

Customer's of OCWEN

• What happens when their accounts are sold to OCWEN?• Portfolios transferred to OCWEN.

• Do they find out in an appropriate manner?• Customer’s may receive a letter that their loan has been

transferred.

• Predatory Practices• Fees

Two-faces of OCWEN

• The company acts as if it cares for its customers, but it instead does not.• According to President and CEO of OCWEN, “As the housing market

evolves and continues to recover, the exchange of ideas between housing counselors, mortgage industry decision-makers, regulators and other agency representatives remain critically important. While we each have a different perspective, we all share the same goal - to help preserve homeownership and assist borrowers in distress.” (Ocwen hosts housing advocates, 2013)

• However, homeowners using OCWEN as a servicer provider have logged numerous complaints due to their inability to deal with the company.

Complaints Filed on The Better Business Bureau Website• Complaints lodged on the Better Business Bureau website.

• 1952 complaints filed against business

• Failure to respond to 1242 complaints filed against business.

• 141 complaints filed against business that were not resolved.

• OCWEN has failed to resolve underlying cause(s) of a pattern of complaints.

• Many of the complaints filed by consumers included, but weren’t limited to (bbb.org, 2013):• Inability to reach the same person at the company in order to discuss their problems and dissatisfaction

with what consumers feel are excessive add-on fees.

• Not processing of payments in a timely fashion.

• Failure to respond to requests for loan modifications in a timely manner.

• The company states that fees associated with each loan are agreed to as part of the loan servicing agreement it has with the owner of the loan which may be the loan originator or investors, not the consumer.

How Does OCWEN Operate?

• OCWEN is the collector:• “Mortgage servicers are the housing industry's middlemen, low-

profile companies that handle the day-to-day business of collecting payments, managing paperwork, and initiating foreclosures” (Kroll, A., Pg.35, 2010).

• Some have accused OCWEN in a “federal class-action suit against OCWEN asserts that it has hiked mortgage payments without fair notice, forced borrowers to buy unnecessary insurance, and intentionally processed payments late” (Kroll, A., Pg.35, 2010).

Who is the Manager that Will Change OCWEN?

• The type of manager that will change OCWEN is the type of Manager that can understand the different cultures it entails.• The company does not only do business within the USA, thus

understanding both American and the foreign cultures where the company does business will help the manager to be a better leader to all employees. (Robbins, S.P. & Judge, T.A. 2009)

• Understanding local customs and norms in daily business dealings will allow better interaction and the ability to get all employees to work better on projects versus having to fight to get activities completed. (Robbins, S.P. & Judge, T.A. 2009)

Why Are Employees Upset?

• Upset about dealings of current shareholders.• Over priced purchase of W. Erbey’s, current chairman of OCWEN, home

in September 2012 (Ostrowski, J. , 2012).

• $2 million over actual value.

• According to Aaron Boyd who is the director of research at the executive compensation company Equilar, “publicly traded companies increasingly have bought executives' homes in recent years. During the housing boom, executives could sell homes without relying on their employers' help…’This has really become an issue over the past four years, as housing prices have dropped,’"(Ostrowski, J. , 2012).

Comments from Former Employees

• Employees were asked by the Glassdoor to rate the company.• Comments ranged from mediocre to downright horrible.

• The comments were for issues ranging from management to training and any item in between.

• One individual related the company to a circus and stated that the turnover was higher than a fast food restaurant.

• Also equated to working in a sweatshop (Ocwen Financial Reviews, 2013).

What Happens if OCWEN Doesn’t Change?

• Competitors will continue to take over portfolios.• Bayview Loan Servicing

• Nationstar

• Further Governmental Monitoring.

Closing Thoughts About OCWEN

• Don’t grow faster than your employees can carry the brand.

• Reward the employees that work with and for you.

• Understand that todays workers will be tomorrow’s leaders.

References

• Browdie, B. (2012). Ocwen Financial to Get Mortgage Monitor. American Banker, 177(186), 16.

• Hawkins, L. (2013, Jun 17). OneWest bank to lay off 725 workers in austin. McClatchy - Tribune Business News. Retrieved from http://search.proquest.com/docview/1368070426?accountid=38569

• Kroll, A. (2010). ALWAYS BE FORECLOSING. Mother Jones, 35(1), 34-35.

• Ostrowski, J. (2012, September 13). Mortgage firm Ocwen buys chairman's house for $2 million more than he paid at peak. Palm Beach Post, The (FL).

• Robbins, S.P. & Judge, T.A. (2009). Organizational Behavior. Upper Saddle River: Pearson Prentice Hall. ISBN 13: 978-0-13-60717-3

• “Our Company.” (2012). OCWEN. Retrieved from http://www.ocwen.com/our-company

• Ocwen Financial chief accountant resigns. (2013). EquityBites (M2).

• Ocwen hosts housing advocates, regulators and government agencies to discuss homeownership in the evolving housing market. (2013, Apr 30). NASDAQ OMX's News Release Distribution Channel. Retrieved from http://search.proquest.com/docview/1346938977?accountid=38569

• Ocwen, Walter Investment to complete purchase of Residential Capital. (2012). EquityBites (M2)

• BBB. (2013) Retrieved from the web http://www.bbb.org/central-florida/business-reviews/loan-servicing/ocwen-loan-servicing-in-orlando-fl-13002055

• Glassdoor. (2013). Retrieved from the web http://www.glassdoor.com/Reviews/Ocwen-Financial-Reviews-E5986.htm