Thursday, March 26, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

NY investigates mortgage firm’s insurance deals

By
August 06, 2014 |

WASHINGTON — New York’s top financial regulator said Monday he will investigate whether the nation’s largest overseer of subprime mortgages, Ocwen Financial Corp., overcharged struggling homeowners on insurance.

In a letter Monday, New York Financial Superintendent Benjamin Lawsky said Ocwen created complex business arrangements apparently to funnel as much as $65 million to Altisource Portfolio Solutions S.A., a publicly traded company led by former Ocwen executives and partially owned by Ocwen’s executive chairman, William Erbey.

Altisource’s total income last year was $130 million, according to its financial filings.

As the chairman of both Ocwen and Altisource, Erbey said in Securities and Exchange Commission filings that he recuses himself from any transactions between the companies. But Erbey oversaw the business deal New York is scrutinizing, Lawsky wrote, which “appears to be a gross violation of this supposed recusal policy.”

The stock market’s response to those allegations was dramatic. Altisource, which began the day with a total stock market value of $2.3 billion, began falling within minutes, ending the day down nearly 15 percent. Altisource did not respond to requests for comment. Ocwen issued a single-sentence statement declaring that it “will continue to cooperate” with New York regulators.

At the root of New York’s allegations is a product called force-placed insurance, which servicers like Ocwen force struggling mortgage borrowers to buy if they don’t maintain voluntary homeowners’ insurance. If mortgage borrowers don’t pay up for the newly purchased insurance, Ocwen forecloses on their homes. Lawsky said the extra expense of some policies “can push already struggling families over the foreclosure cliff.”

Regulators including New York’s Department of Financial Services and the Federal Housing Finance Agency have sought to stop big banks and other mortgage servicing companies from profiting by saddling homeowners with allegedly overpriced force-placed insurance. But some mortgage servicers appear to be skirting those rules by selling off nearly non-existent insurance agencies, the AP reported in a story last week.

That story described how Ocwen sold Beltline Road Insurance Agency Inc. as part of an $86 million deal last year with Altisource, where Erbey is chairman and its largest shareholder. The deal occurred in the same month that the Federal Housing Finance Agency formally proposed banning direct insurance commissions from subsidiaries.

Ocwen did not respond Monday to phone calls and emails from the AP. Last week in a statement to the AP, Ocwen noted that it had owned Beltline for only a short period after acquiring it along with the assets of a smaller mortgage servicer. Ocwen said it no longer collects any commissions from Beltline and sold the agency to Altisource solely because the agency didn’t fit in with Ocwen’s business model.

Lawsky, however, alleges that Ocwen used another insurance agency, Southwest Business Corp., as an intermediary for payments to Altisource. That business arrangement will allow Altisource to “generate significant revenue from Ocwen’s new force-placed arrangement while apparently doing very little work,” Lawsky wrote, adding that Altisource’s intent was to “use this opportunity to steer profits to itself.”

New York acknowledged Monday it had already intervened in recent weeks to stop another major mortgage company from selling an affiliated insurance company. It did not provide details, but AP reported last week that, after the AP raised questions about the deal, the Department of Financial Services raised objections about the $100 million by Nationstar Mortgage Holdings Inc. of its insurance agency, Harwood Service Co., which has no website, no independent offices and only a single registered insurance agent.

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

    Vacaville honors top cops, support staff

    By Kevin W. Green | From Page: A1, 2 Comments | Gallery

     
     
    Kings honor Rankin, Mustangs

    By Paul Farmer | From Page: A2, 1 Comment | Gallery

    Padan Elementary demonstrates new school culture

    By Susan Hiland | From Page: A3, 1 Comment | Gallery

     
    Fairfield mall to host first aid kit assembly party

    By Susan Hiland | From Page: A3

     
    Fairfield PD chief to address Solano GOP

    By Susan Hiland | From Page: A3, 1 Comment

     
    New meeting location for family support group

    By Kevin W. Green | From Page: A3

     
     
    Fairfield police log: March 24, 2015

    By Susan Hiland | From Page: A7

    Suisun City police log: March 24, 2015

    By Susan Hiland | From Page: A7

     
    Frustration permeates college contract negotiations

    By Susan Winlow | From Page: A7 | Gallery

    .

    US / World

    Vallejo woman’s story a hoax, police say

    By The Associated Press | From Page: A1, 4 Comments

     
    Deceased woman’s video supports Wolk’s bill

    By The Associated Press | From Page: A4

    Ferguson residents rattled by another shooting death

    By The Associated Press | From Page: A6, 1 Comment

     
    Man threatened suicide before shooting officer

    By The Associated Press | From Page: A6

    .

    Opinion

    China mustn’t make Greenspan’s mistake on stocks

    By William Pesek | From Page: A5

     
    We deserve freedom to choose our fate

    By Kelvin Wade | From Page: A5, 3 Comments

     
    .

    Living

    Community Calendar: March 26, 2015

    By Susan Hiland | From Page: A2

     
    Today in History: March 26, 2015

    By The Associated Press | From Page: A2

    After several years, my nieces now live with their father and are miserable

    By Kathy Mitchell and Marcy Sugar | From Page: A9

     
    Horoscopes: March 26, 2015

    By Holiday Mathis | From Page: A9

    .

    Entertainment

    David Crosby in car accident with jogger

    By The Associated Press | From Page: B5

     
    Contract not renewed for ‘Top Gear’ host

    By The Associated Press | From Page: B5

    TVGrid

    By Daily Republic Syndicated Content | From Page: B5

     
    Felicity Jones excited, tight-lipped about Star Wars role

    By The Associated Press | From Page: B5

    .

    Sports

    After 1st division title in 39 years, Warriors want more

    By The Associated Press | From Page: B1

     
    Local report: Rodriguez boys swim past Vintage

    By Daily Republic staff | From Page: B1

     
    Prep badminton preview: City teams making their marks

    By Brian Arnold | From Page: B1 | Gallery

    6 teams with 10 or more losses most ever to reach Sweet 16

    By The Associated Press | From Page: B1

     
    Change to extra points likely in NFL

    By The Associated Press | From Page: B2

    Bills to honor late owner Wilson with life-sized statue

    By The Associated Press | From Page: B2

     
    Tulowitzki homers, Butler strong in Rockies’ win over Giants

    By The Associated Press | From Page: B2

    Elliott heads to Martinsville to attempt 1st Sprint Cup race

    By The Associated Press | From Page: B2

     
    Alameda County to join talks about new Oakland stadium

    By The Associated Press | From Page: B2

    Rio mayor unveils controversial Olympic golf course

    By The Associated Press | From Page: B2

     
    Joe Gibbs’ son being treated for ‘brain function’ issues

    By The Associated Press | From Page: B2

    America’s Cup organizers want smaller, cheaper boats

    By The Associated Press | From Page: B2

     
    Gomez uses offense and defense, leads Brewers past A’s

    By The Associated Press | From Page: B2

    Cal to host UC Davis in 2019, Cal Poly in 2020

    By The Associated Press | From Page: B2

     
    Lanny McDonald selected as chairman of Hockey Hall of Fame

    By The Associated Press | From Page: B2

    Serena Williams hoping to play at Miami Open

    By The Associated Press | From Page: B2

     
    .

    Business

    .

    Obituaries

    Howard Leon Carnes

    By Nancy Green | From Page: A4

     
    .

    Comics

    Zits

    By Daily Republic Syndicated Content | From Page: A8

     
    Get Fuzzy

    By Daily Republic Syndicated Content | From Page: A8

    For Better or Worse

    By Daily Republic Syndicated Content | From Page: A8

     
    Dilbert

    By Daily Republic Syndicated Content | From Page: A8

    Peanuts

    By Daily Republic Syndicated Content | From Page: A8

     
    Blondie

    By Daily Republic Syndicated Content | From Page: A8

    Garfield

    By Daily Republic Syndicated Content | From Page: A8

     
    Beetle Bailey

    By Daily Republic Syndicated Content | From Page: A8

    Pickles

    By Daily Republic Syndicated Content | From Page: A8

     
    Frank and Ernest

    By Daily Republic Syndicated Content | From Page: A8

    Baldo

    By Daily Republic Syndicated Content | From Page: A8

     
    Rose is Rose

    By Daily Republic Syndicated Content | From Page: A8

    Sally Forth

    By Daily Republic Syndicated Content | From Page: A8

     
    B.C.

    By Daily Republic Syndicated Content | From Page: A8

    Wizard of Id

    By Daily Republic Syndicated Content | From Page: A8

     
    Baby Blues

    By Daily Republic Syndicated Content | From Page: A8

    Cryptoquote

    By Daily Republic Syndicated Content | From Page: A9

     
    Word Sleuth

    By Daily Republic Syndicated Content | From Page: A9

    Bridge

    By Daily Republic Syndicated Content | From Page: A9

     
    Sudoku

    By Daily Republic Syndicated Content | From Page: A9

    Crossword

    By Daily Republic Syndicated Content | From Page: A9