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Ocwen Financial Corp. said on Monday that it has agreed to sell $9.8 billion in mortgage-servicing rights to Nationstar Mortgage Holdings Inc. as the embattled company followed up on previously announced plans to overhaul its business, the Wall Street Journal reported today. In a separate announcement, an Ocwen affiliate, Home Loan Servicing Solutions Ltd., said that it has agreed to be acquired by New Residential Investment Corp. , a real-estate investment trust, for $18.25 a share, or $1.3 billion. Ocwen’s sale of the servicing rights comes after more than two years of regulatory scrutiny over alleged mishandling of distressed homeowners who were in default on their mortgages, seeking modifications or in foreclosure. In December, Ocwen’s executive chairman resigned as part of a $150 million settlement with New York’s top financial regulator, a deal that also included the appointment of an outside monitor.

Ocwen Financial Corp. said today that it has agreed to sell $9.8 billion in servicing rights to Nationstar Mortgage Holdings Inc. as the embattled mortgage-servicing company overhauls its business amid recent regulatory penalties, the Wall Street Journal reported today. The sale comes after years of regulatory scrutiny of Ocwen over alleged homeowner abuses. In December, Ocwen’s executive chairman resigned as part of a $150 million settlement with New York’s top financial regulator, which also included the appointment of an outside monitor. In the wake of the settlement, Ocwen said that it would withdraw from the business of servicing mortgages backed by the U.S. government and would instead focus just on nonagency mortgages. The portfolio of about 81,000 loans included in the sale are owned by Freddie Mac . The deal is expected to close by March 31, with loan servicing transferring in April.

Citigroup Inc., Goldman Sachs Group Inc. and UBS Group AG agreed to pay $235 million to settle a lawsuit over mortgage-backed securities issued by defunct Residential Capital LLC, Bloomberg News reported on Sunday. The three banks reached the agreement with investors led by the New Jersey Carpenters Health Fund, the union fund said in court papers Friday. The investors sued in 2008, alleging the banks failed to disclose that they’d disregarded guidelines in underwriting the securities. The damage claims were based on losses when the investments were downgraded, causing the value of the securities to collapse. The settlement must be approved by U.S. District Judge Katherine Failla in Manhattan before it can take effect. The parties told Judge Failla in November they had reached a settlement in principle, without disclosing the terms publicly. The agreement follows a $100 million settlement reached in 2013 with ResCap and a group of individual defendants. ResCap, formerly the mortgage-servicing unit of Ally Financial Inc., filed for chapter 11 bankruptcy protection in May 2012. Its reorganization plan was approved in December 2013.

Operating in the shadow of Freddie Mac’s business as America’s second-largest guarantor of home loans, the company’s unit serving apartment landlords is booming as borrowers take advantage of looser lending terms, Bloomberg News reported yesterday. The mortgage company underwrote $21.2 billion of debt on apartment buildings in the second half of 2014, triple the total in the first six months. The surge meant the McLean, Va.-based lender almost surpassed the larger Fannie Mae last year to become the biggest provider of U.S. apartment financing, following changes by the agency that oversees both companies. Melvin L. Watt, who took over as director of the Federal Housing Finance Agency last year, is rolling back policies aimed at shrinking the government-controlled finance companies, letting Freddie Mac push into segments of multifamily lending that had been off limits. That’s helping bolster demand for apartment buildings, already the hottest part of the commercial real estate market, as values rise to a point of possible overinflation.

Hedge funds that profited on residential mortgage debt after the financial crisis such as Pine River Capital Management and Canyon Partners are trimming their bets as prices rise, Bloomberg News reported today. Gorelick Brothers Capital is also exiting investments in both uninsured and government-backed home loan securities. The firm is seeking higher returns by raising a private equity fund to buy single-family rental houses, said Rael Gorelick, a co-founder of the firm. Hedge funds that took a risk on distressed mortgage debt after the 2008 housing crash have had robust returns. Canyon Partners made $7 billion on non-agency securities in the decade before and after the financial crisis. Now these firms see dwindling opportunities as investors crowd into the market and issuance declines, pushing up prices of the non-agency debt.

A regulator’s Internet tool to help consumers find good deals on mortgages is under fire from lenders, who say it paints an unrealistic picture of the interest rates available to borrowers, the Wall Street Journal reported today. The rate-checking Internet site was released in January by the Consumer Financial Protection Bureau as part of an effort to encourage borrowers to shop around for their home loans. The online tool allows consumers to see the range of mortgage interest rates available in their state, based on the consumer’s credit score, as well as the loan type, size and down payment. It also shows the number of lenders offering loans at each interest rate. But like much about the 3½-year-old consumer-finance regulator, this action by the bureau is provoking a strong response from the financial services industry. Consumers who use the site for rate quotes “will perceive them as entitlements of the interest rates they ought to be receiving,” wrote Bob Davis, executive vice president of the American Bankers Association, in a letter sent to the CFPB in late January. “It will function as a significant potential source of misinformation to consumers.”

The House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee will hold a hearing on Thursday at 10:30 a.m. ET, will hold an oversight hearing entitled “Consumers Shortchanged? Oversight of the Justice Department’s Mortgage Lending Settlements.” The hearing will examine startling terms in the Justice Department’s two recent mortgage-lending settlements with Bank of America and Citigroup, including a requirement that the banks donate over one hundred million dollars to a list of eligible activist groups. The hearing will also address a letter to Attorney General Eric Holder sent by House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) on November 25, 2014. In the letter, the Chairmen asked the Attorney General why “the terms in the Justice Department’s two latest settlements look less like consumer relief and more like a scheme to funnel money to politically favored special interest groups.”

Exactly 142,462 homes actively in the foreclosure process had been vacated by the homeowners prior to the bank repossessing the property, representing 25 percent of all active foreclosures, as of the end of January 2015, Housingwire.com reported today. That’s the latest according to the first quarter 2015 Zombie Foreclosure Report from RealtyTrac. The total number of zombie foreclosures was down 6 percent from a year ago, but the 25 percent share of total foreclosures represented by zombie foreclosures was up from 21 percent a year ago. Despite a 35 percent decrease in zombie foreclosures compared to a year ago, Florida had the highest number of any state with 35,903 — down from 54,908 in the first quarter of 2014. Zombie foreclosures accounted for 26 percent of all foreclosures in Florida. Zombie foreclosures increased 109 percent from a year ago in New Jersey, and the state posted the second highest total of any state with 17,983 — 23 percent of all properties in foreclosure.

Standard & Poor’s reached a $125 million lawsuit settlement with the largest U.S. state pension fund over inflated ratings on residential-mortgage bond deals, Bloomberg News reported yesterday. S&P will pay the California Public Employees Retirement System (CalPERS) to resolve claims over grades on subprime mortgages during the run-up to the 2008 financial crisis. In multiple accords including the CalPERS deal that will be announced today, S&P and parent McGraw Hill Financial Inc. will pay $1.5 billion in total to resolve similar allegations from the U.S. Justice Department and more than a dozen states. California will receive $210 million as part of S&P’s settlement with the Justice Department and attorneys general of 19 states and the District of Columbia, one of the people said. That sum is separate from S&P’s $125 million agreement with CalPERS.