Kimberly Miller, Palm Beach Post
New York’s Department of Financial Services deepened its investigation this week of West Palm Beach-based Ocwen Financial Corp. with a letter questioning an arrangement that “appears designed to funnel as much as $65 million in fees annually from already distressed homeowners” to a spinoff company doing minimal work.
In the Monday letter to Ocwen General Counsel Timothy Hayes, New York Superintendent of Financial Services Benjamin Lawsky asks for more information regarding the mortgage servicing firm’s involvement with “related company” Altisource Portfolio Solutions regarding forced-placed insurance.
Forced-placed insurance, which can cost five to 10 times more than what a homeowner can get independently, has been charged to borrowers whose policies lapse as they fall behind on mortgage payments.
Banks, including HSBC, JPMorgan Chase and Wells Fargo, have paid hundreds of millions of dollars to settle complaints that they took kickbacks or otherwise colluded with forced-placed insurance companies to collect commissions on policies.