Dec 4 New York's top state bank regulator is yet
to approve Ocwen Financial Corp's recent agreements to
buy two mortgage servicing firms as a result of concerns about
what it says are unfair loan practices, the Wall Street Journal
Ocwen recently struck deals to buy Homeward Residential
Holdings Inc and the mortgage servicing unit of Residential
Capital LLC. Both companies collect mortgage payments and rework
troubled loans for U.S. homeowners.
The two deals would make Ocwen the biggest servicer of home
loans made to borrowers with weak credit histories - also known
as subprime mortgages - and the fifth largest mortgage servicer
in the United States overall.
Ocwen needs the approval of Benjamin Lawsky, New York's
superintendent of financial services. The company has said it
expects the deals to close by early 2013.
In a review of dozens of Ocwen's loan cases, Lawsky's office
found what it sees as evidence of practices it deemed abusive,
the Journal said, citing people familiar with the review. ()
Lawsky's office is demanding that Ocwen bring on a monitor
of his choice who would oversee the company's mortgage
operations for two years and recommend changes in business
practices, the paper said.
"We have not received from any regulator at the federal or
state or any level any findings or evidence we have wrongfully
foreclosed on any borrower. Further, we do everything in our
power to avoid foreclosure," Paul Koches, Ocwen's general
counsel, told the Journal.
Ocwen teamed up with Walter Investment Management Corp
to win a bankruptcy auction for Residential Capital
LLC's mortgage business with a $3 billion bid. Ocwen also agreed
to buy Homeward Residential Holdings from Wilbur Ross' private
equity firm for $750 million in cash and stock.
Ocwen Financial, Lawsky's office and Residential Capital
could not immediately be reached for comment by Reuters outside
regular U.S. business hours.