Ocwen now a legal target

Investors including Pimco and BlackRock are considering filing suit against Ocwen (OCN -7.6%) over its servicing practices and mortgage modifications which they claim hurt the performance of MBS they own, reports the FT. Working with the investor group is the law firm of Gibbs & Bruns which has successfully brought similar cases against the big banks.

The move comes following Ocwen's late-2013 $2.1B settlement with the CFPB, and the NY Dept. of Financial Services last week halting the sale of $2.7B in MSRs from Wells Fargo to Ocwen.

Non-bank mortgage servicers have rapidly growing over the past few years, taking on MSRs from banks who needed to sell because of onerous capital requirements. Ocwen has grown into the biggest, now managing a portfolio of $430B in unpaid principal balances.

Nationstar (NSM -1.9%), Walter Investment (WAC -3%), Home Loan Servicing (HLSS -2.2%)

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Comments (3)
  • Matthew Mazurczak
    , contributor
    Comments (1477) | Send Message
    Becoming a legal target changes the game for investors, used to be a strong proponent of OCN but believe investors needs to re evaluate now.
    11 Feb 2014, 03:18 PM Reply Like
  • cscott24
    , contributor
    Comments (179) | Send Message
    Ocwen threatened to be sued because the CFPB forced them to agree on reducing principal balances for underwater mortgages. Makes sense.


    And there's no coincidence that this news came out soon after last Thursday's announcement regarding the NY regulator not allowing OCN to onboard Wells Fargo's servicing assets.
    11 Feb 2014, 03:40 PM Reply Like
  • hanakookie
    , contributor
    Comments (761) | Send Message
    Mat it only changes for investors in OCN. You know if you rearrange the letters it spells con. Just another flag being flown. No other company can compete with CON due to their understanding that they will pay whatever it takes and then when boarded not only due the homeowners suffer but so do the actual investors. I'm keeping my fingers crossed this is only a OCN issue.
    11 Feb 2014, 05:25 PM Reply Like
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