Altisource Portfolio Solutions promoted John Vella to the newly created position of chief revenue officer, as the company attempts to right its ship in the wake of the intense regulatory scrutiny of Ocwen Financial Corp., its former parent company and biggest customer.
Vella has served as chief operating officer of Equator, the Los Angeles-based developer of default servicing and REO asset management technology, which was founded as REOTrans in 2003. Altisource acquired Equator in August 2013, in a deal that was valued at $70 million and up to $80 million in in additional contingency incentives. Vella has also served on the leadership team of Altisource Labs, the company's technology-investment arm operated out of offices in Bangalore, India and Boston.
The move this month coincides with Luxembourg-based Altisource's Jan. 16 announcement that more than 800 employees and several hundred contractors are being laid off from the technology, outsourcing and fulfillment services provider. The shakeup is in large part the result of the California Department of Business Oversight's efforts to suspend Ocwen's mortgage license.
California requested loan documents from Ocwen 16 times over two years, and the Atlanta-based loan servicer did not provide them, the state claimed in documents filed in support of its complaint. Ocwen is Altisource's largest client and approximately 60% of Altisource revenue comes from its agreements with the nonbank servicer.
In his new role, Vella will focus on "diversifying the reach of Altisource's product suite," by expanding customer relationships and growing its origination business, which includes the Lenders One and Wholesale One cooperatives and the recently acquired Mortgage Builder software division, the company said in Jan .20 press release. Vella will also continue his executive role at Equator.
Prior to joining Equator in 2010, Vella was the executive vice president responsible for special servicing for GMAC/Rescap and before that, was CEO of EMC Mortgage Corp., a lending division of Bear Stearns that was acquired by JPMorgan Chase in 2008.
Ocwen's troubles in California follow a recently-settled dispute with New York regulators that led Ocwen to agree to pay a $150 million settlement and founder William Erbey to resign his position as executive chairman. A focal point of the New York Department of Financial Services' investigation was Ocwen's relationship with Altisource and concerns over "self-dealing" that may have led to mortgage investors and distressed homeowners being charged inflated fees. Erbey also stepped down from as executive chairman of Altisource, effective Jan. 16.
Ocwen (NYSE: OCN) spun off Altisource Portfolio Solutions (NASDAQ: ASPS) in August 2009. Altisource Portfolio Solutions later spun off Altisource Residential Corp. and Altisource Asset Management Corp. as two separate public companies in December 2012. Altisource Residential (NYSE: RESI) is a real estate investment trust that acquires single-family rental properties by purchasing distressed mortgages and real estate owned properties. Altisource Asset Management (NYSE: AAMC) provides portfolio management and corporate governance services to real estate investment firms.
Kate Berry and Matt Scully contributed to this report.