New York’s Department of Financial Services is investigating an alleged scheme by West Palm Beach-based Ocwen Financial Corp.
The investigator has issued a letter questioning an arrangement that “appears designed to funnel as much as $65 million in fees annually from already distressed homeowners” to a spinoff company doing minimal work, according to the Palm Beach Post.
In a letter to Ocwen General Counsel Timothy Hayes, New York Superintendent of Financial Services Benjamin Lawsky has asked for more information regarding the mortgage servicing firm’s involvement with “related company” Altisource Portfolio Solutions regarding forced-placed insurance.
Forced-placed insurance can cost five to 10 times more than a typical plan and is charged to borrowers whose policies lapse as they fall behind on mortgage payments.
In a statement, Ocwen said it will “continue to cooperate with the New York Department of Financial Services and provide the information requested, as we have done with all previous requests from the department.” [PBP] – Christopher Cameron