The Real Reason Servicer Advance Securitization is on Hold

Ocwen Financial’s regulatory woes are creating further uncertainty about bonds backed by receivables for the funds that mortgage servicers advance to investors, once considered a promising asset class

Sales of these bonds, which have helped fund purchases of servicing rights from banks by Ocwen, Nationstar Mortgage, Select Portfolio Servicing and others, have stalled since Standard and Poor’s decided to revise its approach to rating deals.