Shares of Ocwen Financial plunged more than 28% today after it was announced that Chairman William Erbey is stepping down. His resignation comes in connection with “serious conflicts of interest,” according to a statement from a New York regulator.
Ocwen, related stocks plunge
In addition to Ocwen, shares of Altisource Portfolio Solutions plummeted as much as 30%. Shares of Altisource Residential fell more than 7%, while shares of Altisource Asset Management tumbled more than 30%, and Home Loan Servicing Solutions stock slipped more than 5%. USA Today reports that all four companies have ties to Ocwen, and Erbey will resign as board chairman at all four companies as well, according to the New York State Dept. of Financial Services.
In addition to Erbey’s resignation at the four companies, Ocwen will pay $150 million to settle an investigation into Ocwen’s bidding for $39 billion in mortgage servicing rights from Wells Fargo, reports Bloomberg.
Findings of the Ocwen investigation
New York regulators revealed several findings from their investigation into Ocwen Financial. Investigators said Erbey did not recuse himself from financial transactions between Ocwen and a number of the related companies. Additionally, Ocwen’s chief risk officer was also chief risk officer of Altisource Portfolio and reported to Erbey at both companies.
Investigators also found the Ocwen violated a 2011 order from the New York regulator several times. Officials reported 1,358 violations of the order in a limited review of 478 mortgages put into foreclosure while Ocwen was servicing them.
Investigators accuse Ocwen of violating agreement
Among the violations was not confirming Ocwen could legally foreclose on a property before beginning proceedings. Investigators also said the company did not ensure the accuracy of its statements during the proceedings and pursued foreclosures even while mortgage modification applications were still pending.
In addition, they said Ocwen did not keep records confirming that it didn’t pursue foreclosures of properties owned by members of the military who were on active duty and that the company did not assign a customer care representative.