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Compass Point analyst Fred Small in a pair of notes to clients downgraded Ocwen Financial Corp. and Nationstar Mortgage Holdings Inc. due to concerns over earnings capacity and profitability over the next two years.
Small downgraded Ocwen to "neutral" from "buy," saying that while significant risks have been settled, the company still needs to back up its earnings. The analyst explained that a lack of near-term catalysts and still-present regulatory worries dampen valuation expectations. Small also stated that Ocwen mortgage servicing rights portfolio is not responsive to changes in interest...