Ocwen spinoff isn’t worried about California ban

by MPA19 Jan 2015
Executives at Altisource Portfolio Solutions have told investors they believe a suspension of Ocwen Financial’s mortgage license in California is unlikely.

The news comes days after the state of California announced it was looking to suspend the mortgage license of Ocwen, claiming it failed to turn over the right paper work showing it complies with the state’s laws protecting homeowners.

Last Friday, Altisource CEO William Shepro said the company believes the likelihood of a suspension of Ocwen’s mortgage license is “very low,” according to Forbes. Shortly after the announcement, Altisource’s share surged nearly 60%, while Ocwen shares rose over 15%.

Altisource was spun out of mortgage servicer Ocwen in 2009, but still gets 65% of its revenues from Ocwen. The billionaire CEO of Ocwen, Bill Erbey, is also chairman of Altisource.

The California action is the latest against the Atlanta-based servicer, which is currently dealing with a mountain of regulatory issues.  California is accusing Ocwen of defying requests for information by the California Department of Business Oversight (CDBO), which manages the licensing of nonbank mortgage lenders, according to the Los Angeles Times.

Tom Dresslar, spokesman for the state agency, told the newspaper that losing a California license would mean that Ocwen, based in Atlanta, would have to sell its rights to handle bill collection and foreclosures in the state.
 

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