Altisource Portfolio Solutions has reached an agreement with Ocwen Financial. It resolves a dispute that arose when New Residential Investment asked Ocwen for a default services provider that was not Altisource.
The agreement also extends and expands on certain
The companies have a shared history, as Altisource started as a corporate sibling to Ocwen and both were headed by William Erbey. In January 2015, Erbey resigned as the executive chairman of Ocwen as part of
Ocwen's latest set of regulatory problems over its escrow practices was tied to the technology Altisource provided for the servicing function. But as part of the multiple settlements Ocwen entered into with state regulators, it acquired PHH and
The agreement announced this week resolves a contractual dispute related to Ocwen transferring the right to designate service providers for default services other than Altisource to New Residential.
Back in the second quarter of 2020 Ocwen told Altisource that an MSR investor — which at the time was not disclosed but believed to be New Residential based on the size of the portfolio involved — requested the use of a different field services provider, according to Altisource's 2020 10-K filing.
In the fourth quarter, that same investor asked to use a provider for default valuations and certain default title services other than Altisource and began moving these referrals to other service providers in the fourth quarter of 2020.
"Altisource believes that any action taken by Ocwen to redirect these service referrals breaches Altisource's agreement with Ocwen," the filing said. “We are currently in discussions with Ocwen to address this matter, and have reserved all of our rights with respect to this matter."
Ocwen subserviced $64 billion for New Residential at the end of the first quarter and just $16 billion for other investors. In addition, Ocwen ended the quarter with $99 billion of its own MSRs.
The new agreement between Ocwen and Altisource extends the default services agreements by five years to August 2030.
It also gives Altisource the opportunity to provide field services, first and second chance foreclosure auctions, and title services for Ocwen's government-insured or guaranteed mortgages.
There is also a framework for Altisource to expand on the foreclosure trustee services it provides into additional states and to deliver reverse mortgage-related services to Ocwen.
"This agreement should support our growth and strengthen our position as a leading provider of solutions to the mortgage industry," Altisource CEO William Shepro said in a press release.
