William Erbey is getting $1.2 million in cash and medical coverage for his wife after he stepped down from Ocwen Financial Corp. (OCN), one of the largest mortgage servicers, as part of a deal with New York regulators.
Erbey, 65, will receive $725,000 as a severance payment, $475,000 in lieu of relocation benefits, and lifetime health insurance for himself and his spouse, Ocwen Financial said today in a regulatory filing. He’ll also get a $725,000 dividend from his preferred stake in Ocwen Mortgage Servicing before the firm repurchases the holding for $100.
Erbey resigned as Ocwen Financial’s executive chairman and from positions with related companies as part of an agreement with the New York State Department of Financial Services. The regulator, led by SuperintendentBenjamin Lawsky, said in December that it found “serious” conflicts of interest among Ocwen and affiliated firms.
“We will continue to closely monitor Ocwen to ensure that it lives up to its obligations under this agreement, and treats struggling homeowners with the respect and dignity they deserve,” Lawsky said in a statement at the time.
Stock options granted to Erbey before 2012 will be fully vested when he retires, Ocwen Financial said. Options granted in 2012 will vest this year and next and can be exercised at $24.38 a share.
After tumbling 73 percent in 2014, Ocwen Financial has declined 48 percent this year, to $7.86 at 10:13 a.m. in New York.
Erbey agreed not to recruit the company’s staff or solicit its customers for 24 months. The deal with the company calls for him to cooperate with some litigation and audit matters. Margaret Popper, a spokeswoman for Ocwen at Sard Verbinnen & Co., had no immediate comment.
Mortgage servicers handle billing and collections on behalf of lenders or investors who own the loans, and oversee foreclosures when borrowers default. Banks have been selling the rights to reduce their risks in line with new regulations.