New York's top financial regulator Benjamin Lawsky is probing
the business practices of Nationstar Mortgage Holdings Inc.,
widening his investigation of nonbank mortgage servicers amid
concerns about the companies' rapid growth.
Mr. Lawsky sent a letter on Wednesday to Nationstar, the
fifth-largest U.S. mortgage servicer based on the size of its
servicing portfolio, seeking information about the company's
servicing portfolio, staffing levels, recent acquisitions, vendor
relationships and other aspects.
"We have received hundreds of complaints from New York
consumers" about Nationstar mortgage practices, including problems
related to mortgage modifications, improper fees, lost paperwork,
and numerous other issues, Mr. Lawsky wrote in the letter.
A spokesman for Nationstar couldn't be reached for immediate
comment.
The move is the latest by Mr. Lawsky, superintendent of the
state's Department of Financial Services, in a continuing review of
nonbank servicers. Last month, the regulator announced he was
blocking indefinitely a deal in which Ocwen Financial Corp. agreed
to acquire the rights to service $39 billion of mortgages from
Wells Fargo & Co. Ocwen executives have said they are
cooperating with Mr. Lawsky's office.
Since then, Mr. Lawsky has raised concerns that some nonbank
servicers aren't equipped to handle the amount of business they
have taken in recent years, citing complaints from borrowers over
lost paperwork and challenges obtaining loan modifications.
Nationstar, based in Lewisville, Texas, is majority owned by
private-equity firm Fortress Investment Group LLC. Nationstar and
Ocwen have expanded in recent years by acquiring servicing
portfolios from banks, who have been scaling back in the servicing
business in the face of new capital requirements that make the
business more costly.
Write to Andrew R. Johnson at andrewr.johnson@wsj.com
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