InvestmentsMortgage

SEC reportedly investigating nonbanks for sending loans to collections too quickly

Bloomberg: Ocwen and Nationstar could be targets

The Securities and Exchange Commission is reportedly investigating several nonbank mortgage servicers for potentially sending borrowers into debt collection too quickly, according to a report from Bloomberg.

The Bloomberg report, from Matt Scully, states that the SEC is probing nonbanks, including Ocwen Financial, for “prematurely unleashing debt collectors on delinquent borrowers.”

From Bloomberg:

When loans go bad, the firms can write them off and send them to outside collectors. One of the questions the SEC is probing is whether borrowers are getting enough time to make good on their home equity loans once they fall behind, the person said. A servicer may be entitled to a receive a percentage of whatever outside collectors recover, which may be higher than the usual fees it would receive, the person said. Sending loans to collectors prematurely may also cut a servicer’s costs.

Late last month, Ocwen revealed that it was the subject of an SEC investigation into the “fees and expenses charged in connection with liquidated loans and REO properties held in non-agency RMBS trusts.”

Ocwen said that the SEC’s letter requested that the company voluntarily produce documents and information about these fees and expenses, and Ocwen said that it is cooperating with the SEC on this matter.

But that’s not the only SEC letter that Ocwen received.

Again from Bloomberg:

Ocwen said last year that the SEC sent it a letter saying it was investigating the use of collection agents by mortgage loan servicers. The company said it believes the letter was sent to others in the industry.

About the Author

Most Popular Articles

Freddie Mac: Mortgage rates reverse course from last week’s low

This week, the average U.S. fixed rate for a 30-year mortgage jumped to 3.69%. That’s still more than a percentage point lower than the 4.85% of the year-earlier week.

Oct 17, 2019 By

Latest Articles

Dallas tornado leaves 15 miles of homes with at least 50% damage probability

Tornados hit Dallas Sunday night, one gliding along the ground for about 15 miles. The area has at least 50% destruction probability, CoreLogic data shows.

Oct 21, 2019 By