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Th e M Rep o RT | 47 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t LocaL Edition notes that Green Tree's implementation of the NMS standards happened on an accelerated schedule compared to the other firms reviewed, which may have contributed to any failures on its part. As of the end of the first quarter, Fitch estimates Green Tree's servicing portfolio consists of nearly 1.9 million loans with an unpaid principal balance of $196 billion. Approximately 14 percent of that portfolio is subject to OSMO oversight, according to Fitch. The rating watch was applied to six of Green Tree's products, including prime and subprime, and indicates "that there is a heightened probability of a rating change and the likely direction of such a change," Fitch said. new york regulator to expand Probe into non-Bank Practices Benjamin Lawsky BeLieves the game is afoot when it comes to non-Banks in his state. new york // The New York regulator who earlier this year launched a probe into the prac- tices of non-bank mortgage ser- vicers revealed Tuesday he plans to expand his investigations to include their relationships with affiliated firms. Delivering remarks at the Mortgage Bankers Association's 2014 National Secondary Market Conference, Superintendent Benjamin Lawsky of New York's Department of Financial Services said the agency plans to dig into fee-based ancillary services at non-banks such as Ocwen and Nationstar. While Lawsky said there's "nothing inherently wrong" with companies and affiliates providing ancillary services—ranging from debt collection to loan sales—he asserted that a lack of regulatory oversight up to this point has resulted in "potentially conflicted arrangements" between servicers and their affiliates. "Servicers have every in- centive to use these affiliated companies exclusively for their ancillary services, and they often do," he said. "The affiliated companies have every incentive to provide low-quality services for high fees, and they appear in some cases to be doing so." Lawsky's remarks are the latest in a saga that has played out since February, when the regulator halted a mortgage servicing rights (MSR) transaction between Wells Fargo and Ocwen, citing concerns about the latter company's rapid growth over the year and allega- tions of customer abuse. He followed that up with letters to both Ocwen and Nationstar inquiring about their practices and their relationships with affiliated firms. Both servicers have exploded onto the scene, quickly climbing into the ranks of the top five servicing companies as they pur- chase MSRs from banks looking to offload their portfolios to a more lightly regulated operation. While both Ocwen and Nationstar have pledged to work with Lawsky's office to resolve his concerns, they maintain no wrongdoing has been committed. Still, Lawsky remains uncon- vinced. "Regulators have a responsibil- ity to ask whether the purported 'efficiencies' at non-bank mort- gage servicers are too good to be true," he said. Bank of america and the Feds negotiating $12 Billion settlement to stop the investigation into its operations, the Bank is sheLLing out. north carolina //Bank of America is negotiating a settle- ment of at least $12 billion to end investigations into alleged miscon- duct related to toxic mortgages, according to media reports. Citing reports from "people fa- miliar with the negotiations," the Wall Street Journal reported late Thursday that the megabank has been working fervently over the week to come to an agreement with the Justice Department and put an end to speculation on the potential size of the settlement. Representatives for Bank of America and for the Justice Department declined to com- ment on the report. Though the final numbers remain unconfirmed, if true, the settlement would rival the $13 bil- lion paid by JPMorgan Chase last year to resolve similar allegations. It would also come only months after the bank agreed to pay nearly $6 billion to the Federal Housing Finance Agency. Analysts have closely watched legal dealings between ma- jor banks and the Justice Department, wondering if last year's massive settlement with JPMorgan might be the start of a more aggressive course taken by the government in pursuing claims of wrongdoing by banks before the crisis. According to the Journal report, at least $5 billion of the total settlement is expected to go toward consumer relief efforts, including principal reductions, reduced monthly payments, and assistance in removing blight from hard-hit neighborhoods. However, with government negotiators reportedly pushing for a higher settlement amount, it remains to be seen where the final numbers may land—or if the Justice Department might resort to a lawsuit in the event the agreement falls through. SERVICING Benjamin Lawsky of New York's Department of Financial Services said the agency plans to dig into fee-based ancillary services at non-banks such as Ocwen and Nationstar.