Ocwen Financial Corp. (NYSE: OCN) has taken center stage this year for several federal probes into its mortgage servicing practices. And the woes continue, as the company is now being examined over claims that it has stalled home sales by underwater borrowers, according to report from Bloomberg.
The New York Department of Financial Services and the Consumer Financial Protection Bureau are investigating whether Ocwen improperly stalled short sales by borrowers who owe more that their homes are worth, according to two unidentified people briefed on the case who asked Bloomberg to remain anonymous because the probes are confidential.
Specifically, regulators are looking into whether the non-bank servicer is “thwarting” a new rule that mortgage servicers must approve or deny a short sale within 30 days of application, delaying such sales as a means to collect more fees.
“Ocwen has it all figured out,” Deborah Priebe, a senior vice president at Short Sale Success in Henderson, Nevada, told Bloomberg. “There are notorious for asking for one more piece of paper on the 29th day.”
The company, however, stressed that it “has no desire to delay short sales,” and that its costs are increased when the process is prolonged, according to a comment from Ocwen spokeswoman Margaret Popper.
The New York DFS and CFPB investigation is the latest in a laundry list of federal probes into Ocwen this year.
The most recent of which arrived this week, when Monitor of the National Mortgage Settlement Joseph Smith, Jr., issued a report detailing he has hired an independent auditor to scrutinize the company’s loan servicing compliance.
Read more at Bloomberg.
Written by Jason Oliva