Ocwen Financial

Bank regulators in New York are accusing the nation's largest subprime mortgage lender of errors that might have harmed hundreds of thousands of borrowers.

New York's Department of Financial Services accuses Ocwen Financial of backdating letters warning of foreclosure or unsuccessful loan modifications. This means that by the time a borrower receives a letter from Ocwen, it's already too late to do anything about it.

AP/Mike Groll

New York banking regulators are investigating one of the nation's largest non-bank mortgage servicing companies, Ocwen Financial, over worries the company is bilking $65 million a year in kickbacks from both struggling homeowners and investors.

Watchdogs are scrutinizing the controversial, but common, practice of forcing homeowners to buy overpriced property insurance once they fall behind in their mortgage payments.