Ocwen Said to Have Stalled Home Sales by Underwater Borrowers

Ocwen Financial Corp. is being examined over whether it improperly stalled short sales by borrowers who owe more than their homes are worth, according to two people briefed on the case, as troubles deepen for the mortgage servicer whose stock has slumped 60 percent this year.

The New York Department of Financial Services and the U.S. Consumer Financial Protection Bureau are investigating whether Ocwen is thwarting a new rule that mortgage servicers must approve or deny a short sale within 30 days of an application. They’re examining whether Ocwen is delaying such sales to collect more fees, according to the people, who asked not to be identified because the probes are confidential.