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Without naming names, the CFPB said in a report released Thursday that, based on its examinations, servicers made borrowers jump through hoops to qualify for loan modifications and were lax about maintaining accurate records.
January 30 -
Concern is mounting that Nationstar, Ocwen Financial and Walter Investment are getting so big so quickly that they are becoming too difficult to manage and should consider tapping the brakes on acquisitions.
November 8 -
Benjamin Lawsky, who runs the New York Department of Financial Services, has become a top industry cop, taking on money launderers, payday lenders and even Bitcoin. In an interview, he discusses the need to break new ground while playing nice with federal regulators.
August 14
New York regulators halted Ocwen Financial's (OCN) deal to buy a mortgage servicing portfolio from Wells Fargo (WFC) out of concern that the nonbank is growing too fast.
Ocwen said Thursday it had agreed "to put an indefinite hold" on its $2.7 billion purchase of the servicing rights from Wells at the request of Benjamin Lawsky, the superintendent of New York's Department of Financial Services. Based in Atlanta, Ocwen has a New York mortgage banking charter.
"Ocwen will continue to work closely with [Lawsky's department] to resolve its concerns about Ocwen's servicing portfolio growth," the company said in a press release. Bloomberg News had reported earlier Thursday that the deal was on hold.
Concerns were raised about Ocwen's ability to service the 184,000 loans, totaling $39 billion, that it planned to take over from Wells after an independent monitor reviewed the servicers operations, a person familiar with the situation says.
The monitor has been assessing whether Ocwen has enough staff and capacity to handle delinquent loans. An examination by the New York regulator in 2012 found gaps in Ocwen's servicing records and areas of noncompliance in offering borrowers alternatives to foreclosure.
Wells Fargo did not respond to a request for comment Thursday.
Lawsky has emerged as one of the country's most active and assertive regulators, and gained national prominence by going after large banks on money laundering and consumer protection issues and breaking ranks with federal counterparts.
His intervention in the servicing deal with Wells suggests that he may require Ocwen to provide further evidence it is following beefed-up servicing requirements or additional measures for the sale to go through.
Regulators have largely supported an expanded role for nonbank servicers given banks' servicing lapses in recent years.
But concern has mounted among investors and analysts that the three major nonbank servicers Ocwen, Nationstar (NSM), and Walter Investment (WAC) are becoming too big to handle more acquisitions.
Ocwen has catapulted itself into the ranks of the top 10 mortgage servicers and is now ranked as the seventh-largest mortgage servicer, behind only the top four banks, Nationstar and U.S. Bancorp (USB).
Nonbank servicers have been aggressive in acquiring servicing rights as large banks deliberately reduce their exposure due to changing capital rules, increased regulatory scrutiny and the desire to shed noncore customers.
