Altisource stock yo-yo's after Lawsky’s callout
Earlier on Monday, New York State’s Department of Financial Services Superintendent Benjamin Lawsky sent a letter to the general counsel of Ocwen Financial Services (OCN).
Lawsky’s letter, a copy of which can be read or downloaded here, says that his office is looking at the relationship between Ocwen and Altisource Portfolio, and Altisource Portfolio’s (ASPS) subsidiary, Hubzu, which Ocwen uses as its principal online auction site for the sale of its borrowers’ homes facing foreclosure, as well as investor-owned properties following foreclosure.
Lawsky’s move comes just four days after Ocwen CEO Bill Erbey said that Lawsky’s indefinite hold on the $2.7 billion MSR deal between Ocwen and Wells Fargo (WFC) has put a freeze on all MSR deals in the market. Erbey made the statement during the conference call for Home Loan Servicing Solutions (HLSS) first-quarter earnings.
Altisource’s stock bounced all over the map after news of the letter broke on HousingWire. After opening at 116.05, the stock eventually fell to 111.04 before closing at 114.24, down 2.79 or 2.38% for the day.
Sterne Agee Analyst Henry Coffey says that the news of the day will continue to cause volatility for Altisource’s stock going forward. "We see the DFS as the primary logjam on the servicing transfer front,” Coffey said. “Until the logjam is broken the stocks in this group are likely to remain in a trading pattern.”
Sterne Agee will continue to rate Altisource as “neutral,” but does suggest that the logjam “breaks/goes away by year-end.”