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April 22, 2014

New York regulator probes Ocwen Financial for possible 'self-dealing'

“New York’s banking regulator is probing Ocwen Financial Corp (OCN.N), which collects mortgage payments, for possibly over-charging borrowers and investors to auction off foreclosed properties.

“Benjamin Lawsky, superintendent of New York’s Department of Financial Services, said in a letter to Ocwen on Monday there were “significant concerns” the company and an affiliate, Altisource Portfolio Solutions SA (ASPS.O), were engaged in so-called “self-dealing” through an online auction site called Hubzu.

“Self-dealing is when a company represents its own interests in a transaction, sometimes to the detriment of its clients’ interests.

“Ocwen, the fourth largest mortgage servicer in the United States in 2013, uses Hubzu, an Altisource Portfolio subsidiary, to auction off borrower homes facing foreclosure and foreclosed investor-owned properties.”

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Read full Reuters article here.

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