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Business

Outgoing Bill Erbey not worried Ocwen’s California battle

By
Kevin Dugan
Published Jan. 17, 2015, 1:16 a.m. ET

Outgoing subprime mortgage scion Bill Erbey is playing chicken with California.

The CEO of an Erbey-chaired company has pooh-poohed the Golden State’s business regulator’s threat to pull Ocwen Financial’s license to do business, just days after the company’s stock had its biggest drop ever.

“Our understanding is that the likelihood of Ocwen losing its license is very low,” Bill Shepro, CEO of Altisource Portfolio Solutions, a major Ocwen client that’s helmed by Erbey, said during a conference call on Friday.

The California Department of Business Oversight has accused Ocwen of dragging its feet in cooperating with an investigation into whether the company is breaking state consumer laws. The company has said it’s fully cooperating.

California represents the largest chunk of mortgages that Ocwen collects on — and losing that portfolio could represent a huge loss of revenue for the company.

Shepro’s comments echo those of other Ocwen insiders, who dismiss the threats from the California DBO. The CEO’s tough language seemed to win over Wall Street, as Altisource’s shares soared 50.6 percent on Friday, to $27.66.

The regulator, though, isn’t budging.

“We’ve never laid odds on the outcome of this case, and we’re not gonna start now,” Tom Dresslar, a spokesman for the regulator, told The Post. “Ocwen’s conduct, we believe, warrants a license suspension, and we believe we have a strong case. We wouldn’t have filed the accusation otherwise.”

During the Friday conference call, Altisource CFO Michelle Esterman announced that the company intended to buy back 2.5 million shares, the company’s second buyback in four months.

The plan has to be approved by authorities in Luxembourg, where Altisource is headquartered.

Friday was scheduled to be Erbey’s last day as the head of Ocwen and four other related companies — the result of a settlement with the New York Department of Financial Services last month for a raft of wrongs, including self-dealing and backdating letters to distressed homeowners.

Altisource is the main client of Ocwen’s, providing technology services, and has a contract that extends until 2025.

David Millar, an Ocwen spokesman, declined to comment on Ocwen’s view of the California case.