Thursday, September 18, 2014
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

.

Solano News

 
Theatre DeVille in Vacaville closes

By Barry Eberling | From Page: A1 | Gallery

 
Suisun council candidates all voice business-friendly platforms

By Ian Thompson | From Page: A1 | Gallery

Drug court success stories tell their tales

By Jess Sullivan | From Page: A3 | Gallery

 
Suisun City Senior Center seeks holiday donations

By Susan Hiland | From Page: A3

Lunafest returns to Fairfield in November

By Susan Hiland | From Page: A3

 
Pepperbelly’s for sale

By Ryan McCarthy | From Page: A3

Jury selection begins in 2011 Fairfield murder trial

By Jess Sullivan | From Page: A3

 
Seniors get help at Kroc Center health fair

By Barry Eberling | From Page: A3 | Gallery

Man fleeing deputy jumps into South Putah Canal, asks for help

By Ryan McCarthy | From Page: A4 | Gallery

 
Fairfield police log: Sept. 16, 2014

By Susan Hiland | From Page: A10

Suisun City police log: Sept. 16, 2014

By Susan Hiland | From Page: A10

 
Weather for Sept. 18, 2014

By Daily Republic | From Page: B10

.

US / World

Emotions mount on final day of Scottish campaign

By The Associated Press | From Page: A1

 
More than 2,000 homes threatened in California fire

By The Associated Press | From Page: A4

Maps provide early warning of California fire risk

By The Associated Press | From Page: A4

 
Ex-VA doctor: Phoenix report a ‘whitewash’

By The Associated Press | From Page: A5

School district police stock up free military gear

By The Associated Press | From Page: A5 | Gallery

 
NASA’s Maven spacecraft reaches Mars this weekend

By The Associated Press | From Page: A5

US military role in Iraq raises combat questions

By The Associated Press | From Page: A5

 
Police: Ambush suspect was military re-enactor

By The Associated Press | From Page: A5 | Gallery

House grudgingly approves arms for Syrian rebels

By The Associated Press | From Page: A5

 
Doctor says Toronto Mayor Rob Ford has cancer

By The Associated Press | From Page: A6

US scientist: Ebola unlikely to become airborne

By The Associated Press | From Page: A6

 
Liberia president praises US for Ebola help pledge

By The Associated Press | From Page: A6

Obama reaffirms opposition to US combat in Iraq

By The Associated Press | From Page: A6

 
AP Interview: Iraq premier says no foreign troops

By The Associated Press | From Page: A6

.

Opinion

Why Obama needs congressional authority to wage war

By Albert R. Hunt | From Page: A7

 
Democrats shouldn’t rely on pot and gay marriage

By Ramesh Ponnuru | From Page: A7

 
Homeless find welcome in Vallejo

By Letter to the Editor | From Page: A7

.

Living

Community Calendar: Sept. 18, 2014

By Susan Hiland | From Page: A2

 
My brother fails to make an effort to when it comes to my kids

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

U2 returns to iTunes Top 100 — 26 times

By Los Angeles Times | From Page: B4

 
Directors Guild finds TV diversity hiring stalled

By The Associated Press | From Page: B4

.

Sports

Rodriguez gets 1st MEL soccer win since return to league

By Daily Republic staff | From Page: B1

 
Giants snap tie in 9th, beat Arizona to narrow gap in West to 2

By The Associated Press | From Page: B1

 
49ers’ Kaepernick fined for inappropriate language

By The Associated Press | From Page: B1 | Gallery

Sharks sign D Braun to 5-year, $19 M extension

By The Associated Press | From Page: B2

 
Rockets acquire Jason Terry, picks from Kings

By The Associated Press | From Page: B2

Panthers remove DE Greg Hardy from active roster

By The Associated Press | From Page: B2

 
Raiders rookie Derek Carr focuses on job at hand

By The Associated Press | From Page: B2 | Gallery

Barry Bonds appeal heads back to court

By The Associated Press | From Page: B2

 
NFL, union agree to new drug policy, HGH testing

By The Associated Press | From Page: B2

Pegulas’ bid to buy Bills OK’d by NFL committee

By The Associated Press | From Page: B2

 
FSU benches Winston for 1st half of Clemson game

By The Associated Press | From Page: B2

Umpire West suspended 1 game for grabbing jersey

By The Associated Press | From Page: B2

 
After making ‘mistake,’ Vikings bench RB Peterson

By The Associated Press | From Page: B2

.

Business

Brown signs ride-sharing insurance legislation

By The Associated Press | From Page: B5

 
US homebuilder confidence soars in September

By The Associated Press | From Page: B5

Anthem, hospitals join to offer new insurance plan

By The Associated Press | From Page: B5

 
Drag queens dress down Facebook over names

By The Associated Press | From Page: B5

Wells Fargo pays $290,000 in sex harassment case

By The Associated Press | From Page: B5

 
Fed signals plan to keep key rate at record low

By The Associated Press | From Page: B5

.

Obituaries

Margaret King

By Susan Hiland | From Page: A4

 
.

Comics

Pickles

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Blondie

By Daily Republic Syndicated Content | From Page: A8

 
Dilbert

By Daily Republic Syndicated Content | From Page: A8

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

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

Crossword

By Daily Republic Syndicated Content | From Page: A9