The regulatory scrutiny of Ocwen Financial Corp. (OCN) continues to mount, as the Securities and Exchange Commission prepares to serve its second subpoena in as many months to the nonbank mortgage servicer.
The SEC served the Atlanta-based firm with a subpoena on June 12, seeking documents related to its business dealings with Ocwen spinoffs Home Loan Servicing Solutions and Altisource Portfolio Solutions, as well as a pair of Alitsource's own spinoffs.
And the SEC notified the Atlanta-based firm that it intends to file a second subpoena following Ocwen's restated full-year 2013 and first quarter 2014 earnings, according to
Ocwen is "cooperating" with staff from the SEC's New York Regional Office on the matters, the company said in Monday's regulatory filing. Ocwen general counsel Paul Koches declined to comment further when reached by phone Wednesday.
The June subpoena requests documents related to Ocwen's business dealings with the spinoff companies, "and the interests of our directors and executive officers in these companies," Ocwen said.
Ocwen spun off Altisource Portfolio Solutions (ASPS), a provider of technology, outsourcing and fulfillment services, in August 2009. Altisource Portfolio Solutions later spun off Altisource Residential Corp. (RESI), and Altisource Asset Management Corp. (AAMC) as two separate public companies in December 2012. Altisource Residential is a real estate investment trust that acquires single-family rental properties by purchasing distressed mortgages and real estate owned properties. Altisource Asset Management provides portfolio management and corporate governance services to real estate investment firms.
Home Loan Servicing Solutions (HLSS) was spun off from Ocwen Financial in 2010 to acquire mortgage servicing assets including servicing rights, rights to fees and other income from servicing loans.
Together, these businesses manage the distressed mortgages and REO properties in Ocwen's $435 billion servicing portfolio. William Erbey serves as executive chairman of Ocwen, as well as board chairman of Altisource, Altisource Residential, Altisource Asset Management and HLSS. He owns or controls 26% of Altisource Portfolio Solutions stock and 13% of Ocwen's.
Benjamin Lawsky, New York State’s superintendent of the Department of Financial Services, is
The second SEC subpoena is being prompted by
The SEC subpoena actions follow an April 28 letter notifying Ocwen that the commission is also conducting an investigation into William Erbey's April 2014 surrender of stock options that were included in the executive chairman's equity incentive plan. In the letter, the SEC requests Ocwen's voluntary production of documents and information relating to the option grant and surrender documents from the 2007 plan, Ocwen said in the regulatory filing.