Benjamin Lawsky, head of New York's muscular Department of Financial Services, is raising concerns about the explosive growth of mortgage servicer Nationstar, claiming the company may have "capacity issues that put homeowners at risk."
Lawsky sent a letter Wednesday to Jay Bray, the president and CEO of Nationstar, questioning the Lewisville, Texas, mortgage servicer's rapid growth and ability to service loans for borrowers in New York.
Nationstar apparently failed to fund 141 New York loans in September, "due to insufficient liquidity," Lawsky wrote.
"We have received hundreds of complaints from New York consumers about your company's mortgage practices, including problems related to mortgage modifications, improper fees, lost paperwork, and numerous other issues,"
Last month, Lawsky created a stir in the mortgage servicing industry when Ocwen Financial put an indefinite hold on the $2.7 billion purchase of a mortgage servicing portfolio from Wells Fargo.
Nationstar and other nonbank servicers have been on an acquisition spree, and they have been
In a prepared statement, Bray, said: "We intend to comply fully and transparently with Mr. Lawsky's request. We have a proven track record of helping homeowners succeed and avoid foreclosure, and we welcome the opportunity to share this information."
This story originally appeared in National Mortgage News