Regulator questions Ocwen Group’s insurance deal

State's top banking cop wants to know if policies are enriching Ocwen while hurting homeowners

TRD New York /
Aug.August 04, 2014 02:45 PM

New York state’s top banking regulator is questioning whether subprime loan servicer Ocwen Group is enriching itself through an insurance program, potentially at the expense of at-risk homeowners.

Department of Financial Services superintendent Benjamin Lawsky sent a letter to Ocwen regarding an arrangement brokered by its affiliate, Altisource, to provide a type of homeowner coverage called force-placed insurance, Reuters reported.  Banks and lenders often take out force-placed policies on properties that lack coverage or are insufficiently covered, according to the news agency.

Since premiums are passed on to homeowners, Lawsky worries that it’s in Ocwen’s interest to choose force-placed insurance with high premiums, which could push borrowers who are already on the brink into foreclosure.

“Ocwen hired Altisource to design Ocwen’s new force-placed program with the expectation and intent that Altisource would use this opportunity to steer profits to itself,” Lawsky said in a letter cited by Bloomberg News.

Last year, Ocwen settled a case over alleged homeowner fraud with the U.S. government for $2.1 billion. [Reuters] and [Bloomberg News]Tom DiChristopher


Related Articles

arrow_forward_ios
Manhattan borough president Gale Brewer (Credit: Getty Images)

Why Manhattan borough president Gale Brewer didn’t pay her mortgage for 5 years

JPMorgan to buy $45B of loan servicing rights from Ocwen

JPMorgan to buy $45B of loan servicing rights from Ocwen

Forcing homeowners into expensive insurance

Forcing homeowners into expensive insurance

SEC slaps Ocwen Financial with subpoena

SEC slaps Ocwen Financial with subpoena

Ocwen agrees to stop slapping borrowers with gag orders

Ocwen agrees to stop slapping borrowers with gag orders

Regulator zeroes in on mortgage servicer’s ties to auction site

Regulator zeroes in on mortgage servicer’s ties to auction site

Mortgage investors plan stance against Ocwen

Mortgage investors plan stance against Ocwen

Benjamin Lawsky

Bank regulator investigates Nationstar’s growth

arrow_forward_ios