The New York Times' The DealBook said Ocwen Financial is once again under the scrutiny of a regulator regarding its business practices.
A letter made public coming from the office of Benjamin M. Lawsky, supervisor of the state's Department of Financial Services revealed that the top banking regulator of New York is concerned over the number of potential conflicts of interest the mortgage servicing company has with its affiliates. Lawsky reportedly said in the latter that the conflicts of interest found between Ocwen and four other publicly-traded companies could harm borrowers and might send homeowners in untimely foreclosure.
Citing an example, Ocwen's chief risk officer holding the same position in Altisource Portfolio Solutions was viewed as problematic, aside from the discovery of Erbey chairing all four companies. Despite the fact that Ocwen has removed its chief risk officer from his duties at Altisource, Lawsky said Ocwen was not appreciative of the potential problems that could arise from having dual roles.
Lawsky requested in the letter that Ocwen submit a detailed report about the financial interests of its directors and employees in other companies that he or his office have or may not have mentioned. Moreover, he is also asking for information about the service agreements Ocwen has entered into with other companies.
Ocwen is one of the nation's largest mortgage servicing companies. Founded by William Erbey, DealBook said it has grown into one of the mortgage industry's major players, servicing 2.3 million home loans.
On the other hand, Ocwen had maintained that it has keeping its business relationships with other companies at arms' length. Moreover, the company said its founder had recused himself from any discussions where its affiliates' businesses overlap.
This was not the first time Lawsky's office have impede some of Ocwen's operations, said DealBook. Last month, he stopped the $39 billion of mortgage servicing rights transfer by Wells Fargo to Ocwen over fears that the latter will be overwhelmed with the additional responsibilities to provide services to new loans.
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