Federal and state regulators have unfairly targeted Ocwen Financial Corp. with the goal of forcing it to sell its mortgage servicing portfolio to investors that would foreclose on troubled borrowers, claims a prominent mortgage finance analyst.
Processing Content
The Consumer Financial Protection Bureau "has been overly harsh in its treatment of Ocwen, both measured by the amount of fines and penalties imposed and also because of the impressive record that the company has amassed in terms of helping consumers via loan modifications and permanent principal forgiveness," Christopher Whalen wrote in a paper published last week. The paper, titled "Abuse of Power: The CFPB and Ocwen Financial Corp.," is posted on the Social Science Research Network website.
Whalen is chairman of Whalen Global Advisors, a firm he started this year. Previously, he served as senior managing director and head of research at Kroll Bond Rating Agency.
Author Richard Christopher Whalen is shown at an undisclosed location on Aug. 18, 2008. Whalen is the author of "Inflation." Photographer: Svein Erik Dahl/John Wiley & Sons via Bloomberg EDITOR'S NOTE: NO SALES. EDITORIAL USE ONLY.
Svein Erik Dahl/Via Bloomberg
Mortgage-backed securities investors are unhappy because Ocwen "has one of the best records in the industry for helping consumers via loan modifications," wrote Whalen. These investors would rather "increase the short-term performance of their investment in private mortgage bonds."
Rather than being recognized for its success in modifying loans, Ocwen is "being held to a far higher standard than any other legacy loan servicer," he said.
For example, among the latest set of accusations against Ocwen, "many of the supposed violations included acts that had been previously settled, were identified by Ocwen itself as part of earlier settlements or that had not occurred at all," Whalen wrote.
Whalen also claims there is evidence of collusion between regulators and investors. On April 20, the CFPB filed a law suit against Ocwen; on the same day a separate suit was filed by 20 states, led by North Carolina. (More than 30 states in total have filed related actions against Ocwen in the past month.)
But in the weeks prior to the filing, the short interest in Ocwen's stock "rose significantly…suggesting that some market participants had advance knowledge of the action by the CFPB and the states," said Whalen.
In late March, Ocwen reached an agreement with New York regulators that could have put it on the path to being allowed to acquire MSRs. In February, it reached an agreement with California regulators.
Brad Finkelstein is the originations editor of National Mortgage News. While he covers the entire process, Brad's specialty is loan production and... Read full bio
Fannie Mae and Freddie Mac's portfolios were collectively $10 billion larger than in January, spurred in part by their mortgage-backed securities directive.
Employers who use Nayya's agentic AI platform can provide Foyer, a dedicated 401(k) for homeownership, as a benefit that helps its employees buy a home.
The latest rise in property tax collections at the end of last year continued a nine-quarter streak of increases, according to the National Association of Home Builders.
Lowering minimum standards and using a 2018 proposal as a basis for change may be the quickest path, according to Donald Layton, Freddie Mac's CEO from 2012 to 2019.
The real estate investment trust declared an all-cash offer of $10.80 per share from CrossCountry superior to the fixed stock exchange ratio bid from UWM.
In three separate appearances Thursday, Fed Gov. Lisa Cook, Gov. Michael Barr and Vice Chair Philip Jefferson said they are worried that U.S. involvement in the war with Iran could drive up inflation, leading them to conclude that interest rates should remain steady in the near term.
