January 2017 - The World's Local Bank

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TH E M R EP O RT | 49 SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T LOCAL EDITION THE LATEST DOJ Concedes Battle in BOA 'Hustle' Case THE DOJ REPORTEDLY DECIDED NOT TO PURSUE FURTHER A $1.27 BILLION PENALTY AGAINST BANK OF AMERICA IN REGARDS TO ACQUIRED COUNTRYWIDE'S "HUSTLE" PROGRAM. NORTH CAROLINA // The U.S. Department of Justice conceded the battle against Bank of America in the "Hustle" case, according to media reports in November. The Wall Street Journal reported that the DOJ has given up on trying to obtain a reversal of a federal appeals court decision that overturned a $1.27 billion penalty against Bank of America in late May 2016. A Bank of America spokesper- son, when reached by email, told MReport that the bank had no comment. A jury verdict in 2013 found Bank of America liable of mort- gage fraud through Countrywide Loans' High Speed Swim Lane (HSSL, or "Hustle") program, and a judge ordered the bank in July 2014 to pay the $1.27 billion pen- alty. Former Countrywide execu- tive Rebecca Mairone was fined $1 million for her alleged role. In August 2016, the 2nd Circuit U.S. Court of Appeals in New York denied the DOJ's request for a new trial in the case, arguing that the May decision that over- turned the verdict "overlooked a wealth of evidence" which established that Bank of America committed fraud through the Hustle program. From the time the verdict and the penalty were issued, Bank of America fought to have both dismissed, claiming not only that the "Hustle" program ended prior to the bank's 2008 acquisition of Countrywide but also that the government's accusations in the case amounted only to breach of contract and not fraud. On May 23, 2016, the 2nd Circuit Court overturned both the jury's verdict and the judge's imposed penalty, as well as the penalty against Mairone. The original lawsuit was filed by Manhattan U.S. Attorney Preet Bharara's office against Bank of America in 2012 based on a complaint from whistle- blower Edward O'Donnell, a former Countrywide executive. Ocwen Extends Corporate Debt Maturities to 2020 and 2022 OCWEN'S REFINANCED SENIOR SECURED LOAN NOTES ARE DUE IN 2022 IN EXCHANGE FOR $346.9 MILLION. GEORGIA // Ocwen Financial Corporation announced the com- pletion of the settlement of the previously announced Exchange Offer by its subsidiary Ocwen Loan Servicing, LLC (OLS) pursuant to which OLS issued $346.9 million aggregate principal amount of 8.375 percent Senior Secured Second Lien Notes. The Senior Secured Second Lien Notes, which are known as the New Second Lien Notes, are due in 2022 in exchange for $346.9 million aggregate principal amount, which is 99.1 percent of Ocwen's 6.625 percent Senior Notes, known as Existing Notes, that had been tendered in the Exchange Offer, according to Ocwen. The Exchange Offer was pure - ly a debt-for-debt exchange offer and neither Ocwen nor any of its subsidiaries received any cash proceeds from the transaction. Ron Faris, President and CEO of Ocwen, affirmed the comple - tion of the settlement with the following statement: "We are very pleased to have successfully completed these two important refinancing transactions." The SSTL and New Second Lien Notes are jointly and severally guaranteed by Ocwen, Ocwen Mortgage Servicing, Inc.; Homeward Residential Holdings, Inc.; Homeward Residential, Inc.; and Automotive Capital Services, Inc., which are collectively known as the Guarantors. The New Second Lien Notes and the related guarantees will be unsubordi - nated obligations of OLS and the Guarantors, respectively, and will be secured, subject in each case to certain exceptions and permit - ted liens, by a second-priority lien on the assets of OLS and the Guarantors that secure the SSTL, which is known as the collateral. The lien on the collateral securing the New Second Lien Notes will be junior to the first priority lien securing the SSTL. The New Second Lien Notes have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, also known as the Securities Act, or any state or foreign securities laws. The New Second Lien Notes may not be offered or sold in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not sub - ject to, the registration require- ments of the Securities Act. LOCAL EDITION SERVICING "We are very pleased to have successfully completed these two important refinancing transactions." —Ron Faris, President and CEO, Ocwen

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