Sterne Agee recently announce it would add surveillance of Altisource Portfolio Solutions (ASPS), an affiliate of Ocwen Financial (OCN).

In 2009, Altisource spun off of Ocwen to become a publicly traded REO and title insurance company. Business ties remain, however, and as Ocwen continues to buy mortgage servicing rights. New revenue trickles down to Altisource for handling properties Ocwen foreclosed on.

Therefore around 65% of Altisource revenue comes from Ocwen-passed business.

"A recent detailed and exhaustive review by Sterne Agee of the issues raised by the New York Department of Financial Services suggests that most of the complaints raised by the DFS in a letter to Ocwen are without substance," states a note by analysts watching Altisource.

Here are the four points they say the New York regulator is wrong about Ocwen.

1. Risk manager wasn't conflicted

The risk manager cited by the DFS as working for both OCN and ASPS was moved over to working for just OCN back in September, at the suggestion of OCN. That was not how the DFS presented this in its letter.

2. Executives aren't as spread as suggested

There are no other executive level managers providing services to both OCN and ASPS with the exception of the head of human resources. The only other overlap of note is William Erby, who is Chairman of both boards.

3. Best pricing is a practice

ASPS and OCN have what is called a "most favored nations agreement," meaning that they are required to offer to OCN the best pricing on any service provided.

4. Fees for services are actually competetive

Additionally, to bolster the third point, it is worth noting that following the acquisition of Homeward and Rescap, ASPS was able to take a detailed look at what other providers of related services were charging and found that its fees were lower to in-line with these two larger providers.