By Peter Rudegeair
Feb 6 New York's principal bank regulator has
indefinitely halted Ocwen Financial Corp's purchase of
the right to collect payments on a portfolio of mortgages from
Wells Fargo & Co, Ocwen said on Thursday.
The New York Department of Financial Services, led by
Superintendent Benjamin Lawsky, is concerned that Ocwen lacks
the ability to handle the additional servicing load, a person
familiar with the matter said.
In January, Ocwen announced it was buying for an undisclosed
sum the servicing rights to 184,000 Wells Fargo home loans with
a total principal balance of $39 billion.
Lawsky's office has previously taken action against Ocwen.
In December 2012, the department announced that it was requiring
the Atlanta-based company to install a monitor to ensure Ocwen
was meeting certain mortgage servicing guidelines.
Ocwen agreed to follow the mortgage servicing rules, such as
ending robo-signing and other practices, to get the regulator's
approval to purchase Goldman Sachs Group Inc's Litton
Loan Servicing unit in September 2011.
The rapid rise of specialty servicers like Ocwen has drawn
the attention of state regulators, as well as the Consumer
Financial Protection Bureau, who wonder whether such companies
have the systems in place to collect mortgage payments in large
A spokesman for Wells Fargo declined to comment. Ocwen said
in a statement that it would continue to work with the New York
Department of Financial Services to resolve any concerns.
News of the New York superintendent's action was first
reported by the Wall Street Journal.