Regulator Turns Eye to Nationstar on Mortgage Servicing Concerns

After delving into the operations of Ocwen (NYSE: OCN) including a probe into the company’s relationships with its subsidiaries announced last week, New York Banking regulator Benjamin Lawsky is now turning an eye toward Nationstar (NYSE: NSM). 

The regulator is probing the mortgage servicing giant, which owns reverse mortgage originator Greenlight Financial, on its ramp-up of mortgage servicing rights; now spanning 2.3 million customers. 

In a statement to shareholders and to the public on the regulator’s inquiry into Nationstar, CEO Jay Bray said the company is cooperating with Lawsky on the requests, which were made in a letter to Nationstar today. 

The letter seeks information about Nationstar’s servicing portfolio growth and servicing practices in 2013 and requests information on its servicing portfolio, staffingn levels, business practices, vendors, MSR acquisitions and borrower letters, the company disclosed. 

“We intend to comply fully and transparently with Mr. Lawsky’s request, just as we do when working with the dozens of state and federal regulators who oversee our business and industry on a daily basis,” Bray said in the statement, citing 100,000 loan modifications and workouts last year and successful refinances for 60,000 homeowners. 

In February, the New York banking department halted Ocwen’s agreement to buy the rights to service $39 billion of loans from Wells Fargo, a move that stemmed from ongoing investigations into Ocwen regarding alleged misconduct toward homeowners in its existing MSR portfolio. Ocwen is the parent company of Liberty Reverse Home Equity Solutions, one of the largest reverse mortgage originators by volume. 

Written by Elizabeth Ecker

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