The New York State Financial Services chief understands that even fines that seem humungous to the ordinary citizen are for financial institutions just “the cost of doing business.”  Unless some of these financial officers go to jail, business is going to continue as usual.   But Lawsky has his eyes wide open.

• At the center of New York Department of Financial Services chief Ben Lawsky’s concerns are Ocwen’s relationship with Altisource Portfolio Solutions and its home-auction website subsidiary Hubzu.
• “Hubzu appears to be charging auction fees on Ocwen-serviced properties that are up to three times the fees charged to non-Ocwen customers,” writes Lawsky’s office. In other words, when Ocwen chooses Hubzu to market a property, the fee is 4.5%, but when Hubzu competes for business in the open market, it’s 1.5%.
• “The relationship between Ocwen, Altisource Portfolio, and Hubzu raises significant concerns regarding self-dealing. In particular, it creates questions about whether those companies are charging inflated fees through conflicted business relationships, and thereby negatively impacting homeowners and mortgage investors.
• Speaking Thursday on the Home Loan Servicing Solutions earnings call, Ocwen boss Bill Erbey says Lawsky’s hold on the purchase of $2.7B in MSRs from Wells Fargo has put a freeze on all MSR deals in the market.