First they came for the banks. It's been a nice run for the nonbank servicers, but they're prime targets now. The NYT follows up Ben Lawsky's blocking of Ocwen's (OCN) purchase of more MSRs from Wells Fargo with an expose of supposed abuses by the Ocwens and Nationstars (NSM) of the world.
Companies like OCN and NSM have 17% of the mortgage servicing market today, up from just 3% 4 years ago.
To review: The specialty servicers for years have been purchasing MSRs from banks who didn't want the capital and legal issues, and few have profited more than Bill Erbey's Ocwen and offshoots like Altisource Asset Management (AAMC), Altisource Portfolio Solutions (ASPS), Altisource Residential (RESI), and Home Loan Servicing Solutions (HLSS).
Previous: More legal issues for Ocwen.