Feb 26 New York's banking regulator on Wednesday
requested financial information from Ocwen Financial Corp
about executives' holdings and connections to affiliated
companies that raise conflict of interest questions about the
company that collects payments on mortgages.
Benjamin Lawsky, Superintendent of New York's Department of
Financial Services, sent a letter to Ocwen seeking information
about stock holdings and other ties between Ocwen's officers and
directors and four affiliated companies.
Lawsky said in the letter that he was concerned that a
"tangled web of conflicts could create incentives that harm
borrowers and push homeowners unduly into foreclosure."
A spokeswoman for Ocwen did not immediately respond to a
request for comment.
The letter comes amid increased scrutiny of mortgage
servicers like Ocwen whose explosive growth since the financial
crisis has raised questions about whether they are properly
handling home loans. The specialty companies have taken over
much of the business of servicing mortgages from traditional
In early February, Lawsky's office halted Ocwen's purchase
from Wells Fargo of the servicing rights on 184,000 home loans
with a total principal balance of $39 billion.
The office was concerned with Ocwen's ability to take on the
additional servicing load, a person familiar with the matter
said at the time.
Ocwen executive chairman William Erbey also chairs four
other affiliated residential real-estate companies: Altisource
Portfolio Solutions SA, Altisource Residential Corp
, Altisource Asset Management Corp and Home
Loan Servicing Solutions Ltd.
In a mid-February speech, Lawsky urged regulators to hinder
the growth of specialty mortgage servicers like Ocwen in order
to protect homeowners.
"We are seeing far too many struggling homeowners getting
caught in a vortex of lost paperwork, unexplained fees and
avoidable foreclosures," Lawsky said.
Ocwen collects mortgage payments on nearly one out of every
twenty U.S. home loans, making it the fourth largest mortgage
servicer behind Wells Fargo & Co, JPMorgan Chase & Co
and Bank of America Corp, according to industry
publication Inside Mortgage Finance.