Altisource Portfolio Solutions reveals CFPB probe into relationship with Ocwen
Received letter about potential enforcement action
The Consumer Financial Protection Bureau is looking into the relationship between Altisource Portfolio Solutions and Ocwen Financial, Altisource revealed on Thursday.
Altisource disclosed in its yearly 10-K filing with the Securities and Exchange Commission that it received a “Notice and Opportunity to Respond and Advise” letter from the CFPB late last year about a “potential enforcement action” against Altisource.
According to the filing, which was spotted by Seeking Alpha, Altisource said that it received the NORA letter on Nov. 10, 2016.
The letter said that the CFPB is “considering a potential enforcement action against Altisource relating to an alleged violation of federal law that primarily concerns certain technology services provided to Ocwen.”
As the SEC filing notes, a NORA letter gives the recipient the opportunity to respond before an enforcement action is undertaken, which Altisource did in December.
“On December 15, 2016, we provided a written response to the NORA letter setting forth the legal, policy and factual reasons why we believe an enforcement action is not warranted,” Altisource said in the filing. “We are committed to resolving any potential concerns of the CFPB.”
Considering that the 10-K is a filing for investors, Altisource cautions that a CFPB enforcement action could have a negative impact on its business.
“If the CFPB were to bring an enforcement action against us, the resolution of such action could have a material adverse impact on our business, reputation, financial condition and results of operations,” Altisource said in the filing. “However, we believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with any potential CFPB enforcement action that may be under consideration.”
This isn’t the first time that a regulator has probed the relationship between Ocwen and Altisource.
Last year, Ocwen was fined $2 million by the SEC for its relationship with Altisource, and other infractions.
And before that, the relationship between Ocwen and Altisource was part of the reason for a massive fine by the New York Department of Financial Services.
In that case, the issue was Ocwen’s close relationship with Altisource Residential, Altisource Asset Management Corp, Altisource Portfolio Solutions, and Home Loan Servicing Solutions, and William Erbey’s role as the chairman of each company.
Erbey founded Ocwen, and served as chairman of the board of Ocwen, Altisource Residential, Altisource Asset Management, Altisource Portfolio Solutions and Home Loan Servicing Solutions until the relationship between those companies became the subject of intense investigation from the NYDFS.
The NYDFS investigation ultimately led to Erbey’s resignation from his positions with each company and a $150 million fine for Ocwen.
Whether another fine is coming because of Ocwen and Altisource’s relationship is another matter yet to be determined.