Home Loan Servicing Solutions, Ltd. Signs Agreement With Deutsche Bank National Trust Company
February 18 2015 - 8:30AM
HLSS Holdings, LLC ("HLSS Holdings"), Administrator to the HLSS
Servicer Advance Receivables Trust (the "HSART Trust") and a wholly
owned subsidiary of Home Loan Servicing Solutions, Ltd. ("HLSS"),
today announced that it has reached an agreement with Deutsche Bank
National Trust Company (the "Trustee") regarding claims made by
BlueMountain Capital Management, LLC, a purported holder of notes
issued by the HSART Trust.
It was noted in the agreement that no Noteholder or Note Owner,
other than purported Note Owner BlueMountain, has informed the
Trustee that it agrees with BlueMountain's allegations, and the
Administrative Agents and certain Noteholders other than
BlueMountain have informed the Trustee that they do not agree with
BlueMountain's allegations. HLSS intends to vigorously defend
against the claims set forth by BlueMountain and assert all of its
rights in relation to this matter.
The parties agreed, among other things, that during the term of
the agreement the Trustee will not commence a judicial proceeding
to obtain judicial guidance on the merits, if any, of the
BlueMountain allegations. During such period, HLSS Holdings agreed
to allow the Trustee to withhold certain excess funds that would
otherwise be distributable from the HSART Trust to HLSS
Holdings.
Management and the Board of HLSS have received multiple
proposals from third parties who are interested in pursuing a
strategic transaction with HLSS. HLSS is working with its financial
and legal advisors to evaluate these and other options that may be
available to the company. No decision has been made to pursue a
strategic transaction and there can be no assurances that
these efforts will lead to such a transaction.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts
included in this press release including, without limitation,
statements regarding our financial position, business strategy and
other plans and objectives for our future operations, are
forward-looking statements.
These forward-looking statements include declarations regarding
our management's beliefs and current expectations. In some cases,
you can identify forward-looking statements by terminology such as
"may," "will," "might," "should," "could," "would," "intend,"
"consider," "expect," "foresee," "plan," "anticipate," "believe,"
"estimate," "predict" or "continue" or the negative of such terms
or other comparable terminology. Such statements are not guarantees
of future performance as they are subject to certain assumptions,
inherent risks and uncertainties in predicting future results and
conditions that could cause the actual results to differ materially
from those projected in these forward-looking
statements. Important factors that could cause actual results
to differ materially include, but are not limited to, the
following:
- The ability to resolve the alleged event of default under the
Sixth Amended and Restated Indenture, dated as of January 17, 2014,
by and among HLSS Servicer Advance Receivables Trust, Deutsche Bank
National Trust Company, HLSS Holdings, LLC, Ocwen Loan
Servicing, LLC, Wells Fargo Securities, LLC and Credit Suisse AG,
New York Branch;
- Whether a strategic transaction is entered into, and if entered
into, whether that transaction is consummated;
- Assumptions about the availability of and our ability to make
acquisitions of residential mortgage assets
from Ocwen Financial Corporation and its subsidiaries
(collectively, "Ocwen") or others on terms consistent with our
business and economic model;
- Estimates regarding prepayment speeds, default rates,
delinquency rates, severity, servicing advances, amortization of
Notes receivable - Rights to MSRs, custodial account balances,
interest income, operating costs, interest costs and other drivers
of our results;
- The potential for fluctuations in the valuation of our Notes
receivable - Rights to MSRs and Loans held for investment;
- The impact of the change in our accounting convention related
to the valuation of our Notes receivable - Rights to MSRs and
timing and cost of the remediation of a related material weakness
in our internal control over financial reporting as described in
Part II, Item 4, "Controls and Procedures" of our Amendment No. 1
to Form 10-K filed on August 18, 2014 (the "2013 Form
10-K/A");
- Assumptions regarding the availability of refinancing options
for subprime and Alt-A borrowers;
- Expectations regarding incentive fees in our servicing contract
and the stability of our net servicing fee revenue;
- Assumptions about the effectiveness of our hedging
strategy;
- Assumptions regarding amount and timing of additional debt or
equity offerings;
- Assumptions related to sources of liquidity, our ability to
fund servicing advances, our ability to pursue new asset classes
and the adequacy of our financial resources;
- Assumptions regarding our financing strategy, advance rate,
costs and other terms for financing new asset classes;
- Assumptions regarding margin calls on financing
facilities;
- Changes in rating methodologies by our rating agencies and our
ability to obtain or maintain ratings of our financing
facilities;
- Our ability to enforce our contractual remedies against
Ocwen;
- The ability of Ocwen to obtain or maintain ratings of its
financing facilities;
- Our status with respect to legal ownership of the rights to
mortgage servicing rights we acquired from Ocwen;
- Our ability to pay monthly dividends;
- The performance of Ocwen as mortgage servicer;
- The ability of Ocwen to maintain its residential mortgage
servicer ratings and the effects, if any, of any changes in such
ratings on our financing arrangements or agreements with
Ocwen;
- Our competitive position;
- Our dependence on the services of our senior management
team;
- Regulatory investigations and legal proceedings against
us;
- Regulatory investigations and legal proceedings against Ocwen,
Altisource or others with whom we may conduct business;
- Uncertainty related to future government regulation and housing
policies;
- Assumptions regarding our tax rate and decisions by taxing
authorities; and
- General economic and market conditions.
All forward-looking statements are subject to certain risks,
uncertainties and assumptions. If one or more of these risks or
uncertainties materialize, or if underlying assumptions prove
incorrect, our actual results, performance or achievements could
differ materially from those expressed in, or implied by, any such
forward-looking statements. Important factors that could cause or
contribute to such difference include those risks specific to our
business detailed within this report and our other reports and
filings with the SEC, including our 2013 Form 10-K/A and our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2014 (the "Q3 Form 10-Q") filed with the SEC. We undertake no
obligation to update or revise forward-looking statements¸ whether
as a result of new information, future events or otherwise. You
should carefully consider the risk factors described under the
heading "Risk Factors" within our 2013 Form 10-K/A, Part I, Item 1A
and within our Q3 Form 10-Q, Part II, Item 1A.
CONTACT: FOR FURTHER INFORMATION CONTACT:
James E. Lauter
Senior Vice President &
Chief Financial Officer
T: +1 (345)815-9902
E: James.Lauter@hlss.com
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