Great job Lawsky…
Things are heating up in the conflict between New York’s top bank regulator and Ocwen Financial Services (OCN), the nonbank that’s become a lightning rod for regulatory intervention in the fast-growing nonbank MSR segment.
The superintendent of New York State’s Department of Financial Services sent a letter Monday to the general counsel of Ocwen, walking through specific concerns and questions the banking regulator has for the nonbank.
DFS Superintendent Benjamin Lawsky has eight primary questions for Ocwen’s general counsel, and he wants them answered by April 28.
Emails to Ocwen’s media relations department were not returned by publication time.
Lawsky’s move comes just four days after Ocwen CEO Bill Erbey said that the Lawsky’s indefinite hold on the $2.7 billion MSR deal between Ocwen and Wells Fargo (WFC) has put a freeze on all MSR deals in the market. Erbey made the statement during the conference call for Home Loan Servicing Solutions (HLSS) first-quarter earnings.
“Until we resolve – this relates to Ocwen – until we resolve New York State we’re not acquiring any new (MSR) portfolios at all. As a matter of fact the entire market – nothing is being put out for bid right now,” Erbey said. “The whole market has stopped until that gets resolved.”
This is the second letter from Lawsky’s office to Ocwen seeking specific answers to broad questions about the company and its relations with affiliates. Lawsky’s office is putting a critical eye to the increasing role of nonbanks seeking MSRs.
Lawsky’s latest letter, a copy of which can be read or downloaded here, says that his office is looking at the relationship between Ocwen and Altisource Portfolio, and Altisource Portfolio’s subsidiary, Hubzu, which Ocwen uses as its principal online auction site for the sale of its borrowers’ homes facing foreclosure, as well as investor-owned properties following foreclosure.