Kevin Dugan, NY Post
Billionaire Bill Erbey is starting to bend.
Bowing to months of regulatory pressure, Altisource Portfolio Solutions — part of a web of Erbey-controlled companies with ties to mortgage servicer Ocwen Financial — will stop imposing a costly type of mandatory insurance on homeowners.
The company is discontinuing the practice “given the uncertainties with industry-wide litigation and the regulatory environment,” Altisource said in a statement on Wednesday.
The move sent shares of Altisource plunging almost 17 percent on Wednesday. The stock fell another 2 percent on Thursday morning to $59.32.
Force-placed insurance, as the practice is known, is imposed by a bank or mortgage servicer when a homeowner’s insurance has lapsed. The policies, which proliferated in the wake of the mortgage meltdown in 2008, have come under fire.