Exam Finds Indications that Problems Remain at Ocwen
Superintendent Benjamin M. Lawsky today announced that the Department of Financial Services is requiring Ocwen Financial Corporation to hire a monitor to ensure that the company complies with an agreement to reform its mortgage servicing practices. The action was taken after an examination by the Department found indications of Ocwen violating the agreement. The monitor will be in place for two years.
Ocwen is one of the largest mortgage servicers and has been growing rapidly, servicing more than 764,000 residential mortgages nationally as of August. In New York, the company services more than 40,000 residential home loan accounts held largely by distressed homeowners.
“It is not enough to have banks and mortgage servicers sign agreements promising to reform their businesses. The best unrealized reforms won’t protect homeowners. To protect homeowners facing the risk of losing their homes, we must ensure that the companies are actually living up to their promises,” Superintendent Lawsky said. “Following complaints about Ocwen’s servicing practices, we conducted a targeted exam of Ocwen’s performance and discovered gaps in the company’s compliance. The Department is requiring the company to hire a monitor so that we can be sure that the reforms are implemented and homeowners have a real chance to avoid foreclosure.”
In September 2011, Ocwen was the first mortgage servicer to agree to the Department’s landmark new Mortgage Servicing Practices designed to correct robo-signing and other troubling foreclosure and servicing practices that were depriving homeowners of the opportunity to avoid foreclosure.
The Department’s examination of Ocwen’s mortgage servicing practices found that, in some instances, the company failed to demonstrate that it had sent out required 90-day notices before commencing foreclosure proceedings or even that it had standing to do bring the foreclosure actions. The exam also revealed gaps in Ocwen’s Servicing Practices, including indications that in some instances it failed to provide the single point of contact for borrowers; pursued foreclosure against borrowers seeking a loan modification; failed to conduct an independent review of denials of loan modifications; and failed to ensure that borrower and loan information was accurate and up-to-date.
Under the new Consent Order, Ocwen has 20 days to find an independent monitor acceptable to the Department. The monitor will review Ocwen’s operations and identify and report on corrective actions within 90 days.