Ocwen set to lose mortgage-servicing contracts with Wells Fargo after default

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(Bloomberg) — Ocwen Financial Corp., the mortgage servicer under attack for its handling of home loans, is being fired from overseeing debt backing two bond deals, according to notices sent to bondholders.

Wells Fargo & Co., the trustee for the transactions, said in letters dated Feb. 24 that a majority of investors had directed it to terminate Ocwen. The bank said that it had issued Atlanta-based Ocwen notices informing the servicer that it was doing so.

Downgrades of Ocwen’s servicing ratings last year triggered technical defaults in the bonds, prompting Wells Fargo to solicit instructions from investors on what to do next. They were also among deals where some bondholders had accused Ocwen of “imprudent and improper servicing practices.”

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