Benjamin Lawsky, a relatively unknown New York State regulator, has put the fast-growing non-bank mortgage servicing industry’s business model in jeopardy. Look no further than Ocwen Financial for proof of a servicing segment that remains marred in uncertainty.
Ocwen is reeling following a dispute with Lawsky that killed a promising a $39 billion acquisition of Wells Fargo’s servicing rights. News of the cancelled deal in mid-November sent the company’s shares down as much as 67 percent from their 52-week high. The stock has recovered slightly, but is still off more than 50 percent from a December 2013 high of $58.07.
Now, investors are left wondering whether the servicer – likened to a shark – will be allowed to continue feeding on new mortgages.