Top subprime mortgage firm accused of abuses
The nation's largest servicer of subprime mortgages has engaged in abuses that could potentially harm hundreds of thousands of borrowers, according to the New York Superintendent of Financial Services.
The state regulator issued a letter Tuesday to Ocwen Financial Corp., documenting the same kinds of suspicious actions that worsened the housing crisis and the Great Recession.
Ocwen inappropriately backdated foreclosure warnings and letters that denied mortgage loan modifications, making it nearly impossible for borrowers to appeal the company's decision, according to the letter from Benjamin Lawsky, New York's Superintendent of Financial Services.
The letter refrains from saying whether the backdating was intentional or the result of poor oversight by Ocwen. An email to Atlanta-based Ocwen was not immediately returned.
Lawsky launched a probe into Ocwen in August amid allegations that Ocwen overcharged struggling homeowners on a product called force-placed insurance, which servicers force borrowers to buy if they don't maintain voluntary homeowners' insurance.
If mortgage borrowers don't pay up for newly purchased insurance, Ocwen forecloses on their homes.
Ocwen managed $106 billion worth of subprime mortgages at the start of 2014, according to Inside Mortgage Finance.
Ocwen shares slid $5.21, or nearly 20 percent, to $21.05 in afternoon trading.
The stock is down 62 percent this year.
Josh Boak in Washington contributed to this report.