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Wells $39 billion Servicing Sale to Ocwen Has Been Terminated

Ocwen Financial and Wells Fargo have terminated their planned mortgage-servicing deal, Wells said in a press release Thursday.

The parties mutually canceled the troubled transaction, the release said. Wells said the cancellation would have no effect on its financial results.

An 8-K filing by Ocwen states the company will receive back its entire $25 million deposit.

Wells had agreed in January to sell $39 billion of mortgage servicing rights to Ocwen, but the deal quickly ran afoul of New York State Department of Financial Services' superintendent, Benjamin Lawsky, who put a hold on it. The New York financial regulator recently claimed that Ocwen sent thousands of backdated foreclosure warnings to borrowers, without giving them adequate time to pay down their balances.

Ocwen Financial last month said it had taken a $100 million charge for a potential settlement for the servicing violations and posted a third-quarter loss.

Wells Fargo is based in San Francisco, and Ocwen has its headquarters in Atlanta.

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