Home Loan Servicing Solutions, Inc.
Robbins Arroyo LLP: Home Loan Servicing Solutions, Ltd. (HLSS) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that an investor of Home Loan Servicing Solutions, Ltd. (NASDAQGS: HLSS) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between February 7, 2013 and January 23, 2015. Home Loan Servicing engages in the acquisition of mortgage servicing assets.
Home Loan Servicing Is Accused of Misleading Investors
The complaint alleges that Home Loan Servicing made false and/or misleading statements and/or failed to disclose that: (i) the company’s business was dependent on Ocwen Financial Corporation (“Ocwen”), which spun off Home Loan Servicing in 2010, conducting its business legally; (ii) the company’s business faced material risks and uncertainties due to the systemic internal control weaknesses at Ocwen; (iii) Ocwen was under investigation for violating applicable federal and state regulations and laws by the New York Department of Financial Services(“NY DFS”) and the State of California; (iv) the company was in breach of certain provisions of its notes held by BlueMountain Capital Management, LLC (“BlueMountain”); and (v) the company faced material risks if it defaulted on its notes.
On December 22, 2014, Home Loan Servicing announced that Director and Chairman William Erbey would resigneffictive January 16, 2015. This announcement came on the same day that Mr. Erbey, founder of Ocwen, agreed to resign as Ocwen’s Executive Director as part of a settlement agreement with the NY DFS related to the agency’s investigation.
On January 13, 2015, it was revealed that California regulators would seek to suspend Ocwen’s mortgage license after Ocwen repeatedly failed to respond to requests for information regarding its compliance with the Homeowner Bill of Rights. Then, on January 23, 2015, Forbes reported that BlueMountain delivered a notice of default to Home Loan Servicing and Ocwen for certain notes, worth approximately $1 billion, that Home Loan Servicing serviced. Shares of Home Loan Servicing declined multiple times, on extremely heavy trading volume, after the market learned the truth about the company’s business prospects.
Home Loan Servicing Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.