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Why Altisource Portfolio Solutions S.A. (ASPS) Fell More Than 40%

Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) fell by 42% on Thursday mainly due to the news that North Carolina issued a cease and desist order preventing Ocwen Financial Corp (NYSE:OCN) from originating new mortgages to be serviced or buying new MSRs until the company showed that its financial condition was strong enough, among other asks. North Carolina regulators also noted that if Ocwen were to redress its operational deficiencies and pay its known and potential penalties, that ‘it would indicate that Ocwen continuing as a going concern would be in doubt’. In addition, there are reports that multiple other state mortgage regulators have joined in on the action. Adding salt to the wound, the CFPB has also sued Ocwen for making various mistakes. Given the relationship between the two (Ocwen is Altisource’s biggest customer), some traders evidently sold both Ocwen and Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) at the same time. Ocwen shares fell by 53% versus Altisource’s 42% retreat.

What Does The Smart Money Sentiment Say?

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The smart money wasn’t too bullish on Altisource. Our data shows the number of elite funds with holdings in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) fell by 5 quarter-over-quarter to 12 at the end of Q4.

The Bottom Line

Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) shares have declined sharply due to news of Ocwen’s state/federal regulator troubles. For those of you interested, read ‘11 Most Ridiculous Lawsuits Settlements and Victories of All Time‘.

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