© 2024 WSHU
NPR News & Classical Music
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations
89.9 FM is currently running on reduced power. 89.9 HD1 and HD2 are off the air. While we work to fix the issue, we recommend downloading the WSHU app.

NY regulators investigate mortgage empire

AP/Mike Groll

New York banking regulators are investigating one of the nation's largest non-bank mortgage servicing companies, Ocwen Financial, over worries the company is bilking $65 million a year in kickbacks from both struggling homeowners and investors.

Watchdogs are scrutinizing the controversial, but common, practice of forcing homeowners to buy overpriced property insurance once they fall behind in their mortgage payments.

In a letterto Ocwen, New York's Department of Financial Services says the company essentially owned the insurance company allowing them to make money on both "commissions" and the premiums.

Consumer advocates worry that the steep prices of these policies make it harder for owners to get back on their feet. If homes do end up in foreclosure, it is the investors who end up getting slammed with these secretive policies.

"There needs to be some fee transparency of how much you're going to charge," says Laurie Goodman, Director of the Urban Institute's Housing Finance Policy Center.

"You wouldn't think about going into a supermarket or restaurant and not seeing a price in advance."

Goodman says these insurance policies, called force-placed insurance, are crucial to the housing economy. But, she says, without price transparency there is no incentive for the mortgage company to get a good price for the insurance.

Ocwen Financial did not immediately return phone calls.   

Charles is senior reporter focusing on special projects. He has won numerous awards including an IRE award, three SPJ Public Service Awards, and a National Murrow. He was also a finalist for the Livingston Award for Young Journalists and Third Coast Director’s Choice Award.
Related Content