Bill Erbey, Ocwen’s former Chief Executive Officer (CEO), is gone. That didn’t come as a surprise to many whom were familiar with the Cult of Perplexion which surrounded the Ocwen, Altisource, Hubzu juggernaut. While the Drive By Media continues to ramble on about the $150 Million settlements to bring the NY Banking Czar Benjamin Lawsky’s, claims to somewhat of an end, the reality is that the guidance which Erbey brought to the USS Ocwen, is gone and will leave the Great Ship afloat upon turbulent waters.
Altisource, for quite some time, has been bracing for the blood letting which has now begun. We have multiple reports from Altisource Prime Vendors that Altisource is anywhere from 3 to 16 months behind in payments. More startling, Altisource has apparently begun to simply cancel thousands of orders in what may only be viewed as an attempt to not pay for services rendered. Now, whether this cancelling of orders is to create a backstop of funds to pay what are anticipated to be even more fines coming down the pike or to better avail themselves against the Consumer Financial Protection Bureau (CFPB) investigations and audits which are rumored and in some cases the audits confirmed, is unknown at this juncture.
While Foreclosurepedia had been bullish on Altisource in the past, the reality is that after their recent cleaning of house in Luxembourg including that of lawyers whom appeared to be ones whom favored the Rule of Law, we are now bearish and more on point, Foreclosurepedia is telegraphing that Altisource is no longer a safe haven for those Regional Clients whom had come to know Altisource as a legitimate Portfolio Player.
Foreclosurepedia recently spoke with several Altisource Portfolio Prime Vendors whom all parrotted virtually the same theme: We are not being paid. Remember, this is not the Contractors; these are Order Mills. And whereas Altisource has attempted to instill the belief that there is no Doctrine of Privity which extends downward to the Contractor, when Altisource chooses to commit fraud — no other way I am able to view it — that layer of insulation is removed.
The end to the means of fraud in the Mortgage Field Services Industry used to be wealth. Today, though, it is looking more and more like survival. Ironically, Altisource is demanding more and more of its Prime Vendors to provide point-to-point verification of payments for each and every work order that it sends out. This, coupled with Altisource’s recent demands for Certified Financials — costing an average of $25,000 per Vendor — is creating a black hole where Prime Vendors used to be. Many may state that Altisource has laudable goals; however, they are not bringing on Contractors to fill these gaps. And it is quite apparent that Altisource has no intention of obeying the same rules it lays out for those under them.
Altisource is a dangerous option in the Industry, right now. First, Altisource is a foreign national. Second, Altisource, under its parent Ocwen, is not subjected to the same laws, rules and regulations which licensed financial institutions are.
There are no winners in Erbey’s departure with Ron Faris named as new Ocwen CEO. Altisource is floundering; Luxembourg has created an environment of hostility towards the Rule of Law; and the Contractor ultimately continues to loose. I continue to stand by my prediction that if things do not change and change very rapidly, we are going to be attending funerals in a way which makes workplace violence the norm as opposed to the exception in the Mortgage Field Services Industry.