NEW YORK (TheStreet) -- Shares of Ocwen Financial Corp. (OCN) are down -3.07% to $26.83 as New York's Department of Financial Services examines whether the company may have funneled as much as $65 million to an affiliated company, overcharging struggling homeowners on insurance, Reuters reports.
Investigators are looking into the mortgage servicing company's new contracts that provide force-placed insurance with Southwest Business Corp, an agent that was recommended by Altisource Portfolio Solutions SA (ASPS), an Ocwen affiliate, Reuters added.
Insurance agencies affiliated with mortgage servicing companies have an incentive to purchase force-placed insurance with high premiums to push borrowers into foreclosure, Reuters noted.
Separately, TheStreet Ratings team rates OCWEN FINANCIAL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate OCWEN FINANCIAL CORP (OCN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: