Lawsky's 8 questions for Ocwen


At the center of New York Department of Financial Services chief Ben Lawsky's concerns are Ocwen's (OCN -2%) relationship with Altisource Portfolio Solutions (ASPS) and its home-auction website subsidiary Hubzu.

“Hubzu appears to be charging auction fees on Ocwen-serviced properties that are up to three times the fees charged to non-Ocwen customers," writes Lawsky's office. In other words, when Ocwen chooses Hubzu to market a property, the fee is 4.5%, but when Hubzu competes for business in the open market, it's 1.5%.

"The relationship between Ocwen, Altisource Portfolio, and Hubzu raises significant concerns regarding self-dealing. In particular, it creates questions about whether those companies are charging inflated fees through conflicted business relationships, and thereby negatively impacting homeowners and mortgage investors."

The full list of questions

Speaking Thursday on the Home Loan Servicing Solutions (HLSS -1.2%) earnings call (transcript), Ocwen boss Bill Erbey says Lawsky's hold on the purchase of $2.7B in MSRs from Wells Fargo has put a freeze on all MSR deals in the market.

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Comments (4)
  • Stone Fox Capital
    , contributor
    Comments (9545) | Send Message
     
    My only question is whether the services are equal. My understanding is that ASPS offers several level of services and Ocwen may take advantage of more services than non-Ocwen properties.
    22 Apr 2014, 02:16 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (9545) | Send Message
     
    Please confirm that Hubzu charges a 4.5% auction fee on auctions of properties serviced by Ocwen and a 1.5% to 3.5% fee on auctions of properties not serviced by Ocwen. What services are covered by this fee? How do these services differ from those covered by the technology fee? What is the estimated actual cost to Hubzu for providing these services? Is any portion of this fee remitted directly or indirectly to Ocwen, to another affiliate of Hubzu, or to an unaffiliated entity?

     

    From the letter, it appears that the 3x fee is only on a portion of the homes and Lawsky appears unclear on whether the services actually differ. My guess is that a majority of the difference is that Hubzu is providing a higher level of services to Ocwen properties.
    22 Apr 2014, 02:21 AM Reply Like
  • hermosura10
    , contributor
    Comments (10) | Send Message
     
    "The relationship between Ocwen, Altisource Portfolio, and Hubzu raises significant concerns regarding self-dealing. In particular, it creates questions about whether those companies are charging inflated fees through conflicted business relationships, and thereby negatively impacting homeowners and mortgage investors."
    22 Apr 2014, 11:40 AM Reply Like
  • Matthew Mazurczak
    , contributor
    Comments (1476) | Send Message
     
    This Lawsky guy is a idiot. Give it up already. Listen to the ASPS conference call and the issue is explained clearly.

     

    How much longer is this idiot going to drag this on for.
    29 Apr 2014, 04:06 PM Reply Like
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