Sterne Agee estimates that such settlements could cost the nation’s fourth largest servicer $496 million.

Just because a notice of default is signaled, that doesn’t mean the trustee has to yank the servicing away from Ocwen.

Other investment bankers who work the MSR market said declining interest rates and the “Ocwen” effect are hurting values.

Thomas Gamache, national director of retail sales for Guaranteed Rate, has left the company and accepted a position with Citizens Financial Group...

Is Ocwen the seller of the MSRs?

The layoffs “were in various departments and locations, but the majority of them were in corporate (administrative) departments at our headquarters,” spokesman for the company told IMFnews.

The FHFA, so far, has declined to provide a budget figure to the general public.

Ocwen’s plan to sell roughly $182 billion of agency servicing rights may have gone up in smoke this week after it was revealed that the California Department of Business Oversight could pull its mortgage licenses in the state. One servicing advisor, requesting anonymity, said the nonbank’s latest run-in with regulators “effectively put an illiquid label on all of their servicing rights.” Another advisor suggested...

One servicing advisor raised an interesting scenario Tuesday: Maybe Bill Erbey will swoop in and buy all of Ocwen’s shares and take the whole thing private.

Meanwhile, new revelations about regulatory problems in California are likely to make Ocwen’s disposal of servicing rights problematic.