Jan

14

 The rise and fall of the mortgage servicing tycoon might contain lessons. In every interview or article I read about him, I felt in not-so-subtle ways he was poking at the flexions– celebrating his triumph in the highly flexion-centric industry in a way certain to create animosity. For example, his public gloating about his firms 90% tax savings vs. the competition.

"The New Subprime Bet: How Bill Erbey Built A $2.8 Billion Fortune By Getting Inside Homeowners' Heads"

he moved his principal office from Atlanta to St. Croix, in the U.S. Virgin Islands, which happen to be an economic development zone. As a result Ocwen now saves 90% on its corporate income tax. It's also the reason Erbey is now worth $2.8 billion and may be the most innovative man in the mortgage business.

In the meantime, as he avoids the sun in St. Croix, Erbey relishes the attention his financial empire has gotten on Wall Street and on Main Street thanks to his "socially responsible" mortgage innovations. But he makes no pretense: "I am in the business of making money, but I try to do it in a way that I can go home and say that people benefited from what I did today." Even better when his new home saves his shareholders millions in U.S. taxes and happens to be a stone's throw from a Caribbean beach.

People laughed at us for the first 15 or 20 years. Today it's something that has been adopted by the industry.

I wonder what observations might have been made to predict the unraveling. On the other side I received quite a few emails and read quite a few articles suggesting his stocks (ASPS, OCN, both down 30% today, ASPS down from 150+ to 17 in last year) were great values mid-2014, and that the pending legal issues and lawsuits would all blow over.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search