Hedge fund goes after Ocwen spinoff

by MPA12 Feb 2015
One of the 10 largest shareholders of Home Loan Servicing Solutions (HLSS), a spinoff of Ocwen Financial, has filed a class action lawsuit, making it the latest in a line of suits filed against the mortgage company over its relationship with Ocwen.

The group is accusing HLSS’ board of “dereliction of duty” and demanding that it terminate its business relationship with Ocwen, which subservices the mortgages that HLSS holds servicing rights for.

The lawsuit alleged that HLSS failed to disclose its business was dependent on Ocwen and  that HLSS did not inform shareholders that Ocwen was under investigation for allegedly violating federal and state regulations and laws. The group also said it was unaware that HLSS was in breach of provisions of its notes with BlueMountain Capital Management.

In January, Forbes reported that BlueMountain Capital Management notified both HLSS and Ocwen that regulatory sanctions against Ocwen constituted a breach of contract and default on certain notes serviced by HLSS.

Glancy Binkow & Goldberg filed the lawsuit, and it isn't the only firm taking action against HLSS. New York firms Levi & Korsinsky and Pomerantz LLP have also made similar filings. Each class action comprises investors who purchased shares in HLSS from February 7, 2013 through January 23, 2015.



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