Fitch Ratings has issued a comment on this week's announcement that Ocwen Federal Bank FSB (OFB), the primary banking subsidiary of Ocwen Financial Corp. (OCN), has filed an application for voluntary dissolution with its principal regulator, the Office of Thrift Supervision (OTS). In the event that the sale of the bank's deposits has a nominal effect on the company's financial condition, Fitch does not expect the transaction to result in a rating action or outlook adjustment. Historically, the company's bank charter has not been a significant driver in Fitch's overall assessment of OCN given the steady decline in deposit funding. Fitch acknowledges, however, that in electing to relinquish its bank charter, the benefits of federal pre-emption will no longer be applicable to OCN and the company will be required to license and comply with the state lending laws in which it operates.

Although the OTS is currently reviewing the company's application to dissolve its bank charter, Fitch believes that the application will be approved provided there is an appropriate plan for dissolution. Until such time, OFB remains subject to the supervisory agreement issued in April 2004 between the OTS and OFB. Under the terms of the agreement, OFB agreed to improve its mortgage loan servicing practices, including dealings with its customers, and enhance its compliance with applicable laws and regulations. At the time the agreement was signed, OFB had already implemented some of the recommended enhancements and had committed to address the remaining items.

In addition to assessing business performance, Fitch will monitor the company's ability to secure longer term funding and its success in accessing the German retail deposit market through its recent acquisition of Bankhaus Oswald Kruber KG going forward. If the transaction receives regulatory approval and is completed, Fitch would withdraw all outstanding ratings for OFB at such time.

Ocwen Financial Corp. is a financial services company based in West Palm Beach, Florida. The company provides servicing and special servicing of non-conforming, sub-performing residential and commercial mortgages to third parties. OCN is also active in developing servicing-related software.

A complete list of ratings is as follows:

Ocwen Financial Corp.

-- Senior Debt 'B';

-- Short-term 'B';

-- Individual 'D';

-- Support '5';

-- Rating Outlook Stable.

Ocwen Federal Bank

-- Long-term Deposits 'B+';

-- Short-term Deposits 'B';

-- Subordinated Debt 'B-';

-- Individual 'C/D';

-- Support '5';

-- Rating Outlook Stable.