Ocwen Financial now services about one of every four subprime mortgages in the U.S., creating concern among state and federal regulators that Ocwen is mishandling some of the mortgages it now services, citing examples of shoddy paperwork and faulty technology, the New York Times DealBook blog reported today. Regulators and investors, which actually own most of the loans Ocwen services, are also questioning the unusual arrangements between Ocwen — “new co” spelled backward — and four other publicly traded companies where Ocwen head William C. Erbey is chairman. They question such practices as buying up delinquent loans and renting out foreclosed houses. In effect, Erbey’s enterprise has become a complex financial services group, but without the regulatory scrutiny that a bank must face.
