NEW YORK (TheStreet) --Ocwen Financial Corp. (OCN) shares posted gains Wednesday after a regulator that appeared to be targeting the mortgage servicer also went after its chief rival, Nationstar Mortgage Holdings (NSM).
Shares of Nationstar, a mortgage servicer controlled by Fortress Investment Group (FIG), lost 2.5% Wednesday after New York Superintendent Department of Financial Services Ben Lawsky sent a letter to the company indicating it had received "hundreds of complaints from New York consumers" about Nationstar, related to issues such as improper fees and lost paperwork.
"Explosive growth at Nationstar and other nonbank mortgage servicers may create capacity issues that put homeowners at risk," the letter stated.
Ocwen shares, on the other hand, gained 1.37% on the day.Lawsky has raised similar issues about Ocwen. He has also targeted conflicts between Ocwen and other companies overseen by company Chairman Bill Erbey But the fact that Lawsky was also targeting Nationstar seemed to take the pressure off Ocwen for the time being. "The NY DFS action taken against a peer suggests a broader net, which we think is a modest positive for OCN versus a narrow focus," wrote Bank of America Merrill Lynch analyst Kenneth Bruce in reiterating his "buy" rating on Ocwen in a research note published Thursday. --Written by Dan Freed in New York Follow @dan_freed
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