Mortgage Titan and U.S. Citizen William Charles Erbey, who built Ocwen Financial into one of the country’s largest non-bank mortgage servicers, is having problems qualifying for a Maltese passport. Although there has been no reason provided for the holdup on William’s passport application, it could have something to do with the numerous securities violations Williams is accused of. William Erbey is accused by critics of having built an empire on foreclosure misery, and who saves tax by sheltering his companies in the Virgin Islands, Luxembourg and the Caymans. In 2012 he relocated to the U.S. Virgin Islands.
Erbey applied for Malta’s €650,000 “Golden Passport” program. Malta has become a gateway for wealthy investors — mainly from politically unstable parts of the world — to secure a base in London. While expensive, it promises a straightforward citizenship program that allows participants to operate throughout the 28-member European bloc.
A Maltese passport also confers some of the best banking and tax benefits of any country- if you are fortunate enough to buy your way in. What Erbey’s motivations are in regards to attempting to purchase Maltese-European citizenship should be investigated, but it would appear that Erbey is looking for secondary-citizenship to protect his ill-gotten gains.
Erbey has been in hot water with New York State regulators, who are still examining the financier’s business practices. Not only is Ocwen under investigation for continuing to defraud borrowers at every stage of loan servicing, Erbey’s affiliated mortgage services are also under investigation.
Authorities allege Erbey’s Ocwen Financial required underwater homeowners to buy a specific type of home insurance policy through a company, Altisource Portfolio Solutions, in which he has a significant stake. That arrangement allegedly allowed Altisource to generate $65 million in fees. The scrutiny has reduced Erbey’s financial fortune by $500 million in the past year.
In 2011, Ocwen was investigated by New York’s Department for Financial Services for incomplete documentation and record-keeping, falsification of evidence through “robo-signing” and pursuit of foreclosures without legal standing.
Ocwen pushed homeowners into foreclosure and then further profited by funneling default-related business to Erbey’s associated companies. For example, one subsidiary hosted Ocwen’s online auctions; another handled post-foreclosure real estate transactions. Mortgage servicers like Ocwen are essentially debt collectors, collecting monthly principal and interest from homeowners.
In 2013, approximately 9,500 homeowners complained about how Ocwen serviced their mortgages. The Consumer Financial Protection Board (CFPB) teamed up with authorities from 49 states to force Ocwen into a $2 billion settlement for in loan reductions to homeowners struggling to stay afloat and $127.3 million in refunds for 185,000 people whose properties had already been foreclosed upon. Yet no one, not even Erbey went to jail for the scheme that stole thousands of homes.
Erbey shouldn’t qualify for a passport to Malta, but a passport to federal prison. What is left of his fortune from the illegal activites of Ocwen and Altisource should be returned to the thousands of homeowners who were forced into foreclosure by a loan dis-servicer without absolutely no standing to foreclose.
Filed under: foreclosure