The News Tribune cited an anonymous source who told Reuters on Thursday that a top bank regulator has postponed the acquisition of the rights to collect payments on a mortgage portfolio owned by Ocwen Financial Corp from Wells Fargo & Co. The source said the New York Department of Financial Services, led by Superintendent Benjamin Lawsky, believes that the acquisition should be postponed as Ocwen has not enough financial ability to handle the additional servicing load from Wells Fargo.
A statement released in the afternoon of that day by Ocwen had confirmed the postponement of the acquisition deal with Wells Fargo, said the New York Times' the DealBook. The company also added in its statement that it was working closely with the regulator and that it is aiming to resolve the regulator's concerns about the servicing portfolio growth of Ocwen.
DealBook said Ocwen and other specialty services had been acquiring mortgage servicing rights from large global banks valued in tens of billions of dollars in order to further improve its services for its borrowers. However, regulators are alarmed at the potential event that specialty services like Ocwen will get overloaded in terms of servicing capacity.
DealBook said the news was an obvious blow to investors as the closing price of Ocwen's shares had dropped more than 4% on Thursday.
This would not be the first time that Lawsky and his office had taken action against the specialty servicer. The state regulator in December two years ago said in a statement that it will be requiring the Atlanta-headquartered company to install a monitor to make sure that the company is meeting specific guidelines on mortgage servicing, the report on News Tribune said. Ocwen promptly complied with the recommendations of the New York Department of Financial Services, which includes the ending of its robo-signing, in order to obtain the regulator's approval for them to proceed with the acquisition of the Litton Loan Servicing unit of Wall Street bank Goldman Sachs Group Inc in September 2011.
