Daily Archives: January 24, 2015

Ocwen Agrees to $2.5 Million Settlement for Failing to Provide Loan Information

So disappointed that the California regulator settled with Ocwen!

JAN LYNN OWEN

Commissioner of Business Oversight

For Immediate Release Contact: Tom Dresslar

January 23, 2015 (916) 327-0309

Ocwen Agrees to $2.5 Million Settlement for
Failing to Provide Loan Information

Ocwen to also pay for auditor to ensure compliance with state laws

SACRAMENTO – The California Department of Business Oversight (DBO) announced a $2.5 million
settlement today with Ocwen Loan Servicing, LLC over the firm’s failure for more than a year to provide
loan information needed by the DBO to assess Ocwen’s compliance with state mortgage lending laws.
“The Department is committed to supporting a fair and secure financial services marketplace for all
California consumers,” said DBO Commissioner Jan Lynn Owen. “This settlement allows us to move
forward and ensure that Ocwen is meeting its obligations under the law.”
Under the consent order agreement, the DBO will select an independent, third-party auditor, paid for by
Ocwen, whose duties will include ensuring Ocwen provides the DBO all the information it has requested
from loan files. Ocwen also will pay $2.5 million in penalties and cover the DBO’s administrative costs
associated with the case.

The settlement also prohibits Ocwen from taking on any new California customers until the DBO determines
the firm can fully respond in a timely manner to future requests for information, and the DBO will drop its
effort to suspend Ocwen’s license to operate in California. Filed Oct. 3, 2014, the formal accusation grew out of Ocwen’s conduct during a routine regulatory examination and will now be withdrawn.

The third-party auditor will review the loan-file information. Based on the review, the auditor will submit a
report to the DBO on Ocwen’s compliance with the California Residential Mortgage Lending Act, the 2012
Homeowner Bill of Rights, and other state and federal laws and regulations.
Additionally, the auditor will submit a report to the Commissioner and Ocwen that assesses the firm’s loan
servicing procedures, processes and staffing levels. Ocwen will have to adopt an action plan to correct any
deficiencies identified by the auditor. The Commissioner must approve the action plan, and the auditor will
oversee its implementation by Ocwen.

The DBO retains the ability to pursue an enforcement action against Ocwen should the examination of the
loan files uncover substantive violations of laws designed to protect mortgage loan consumers.

Source: California Department Business Oversight

Ocwen sued by investors for mortgage payment negligence

Ocwen Financial (OCN) is about to have another massive battle to fight in what’s becoming an all-out assault on the beleaguered nonbank.

A press release, which does not name investors is availableon the website of law firm Gibbs & Bruns.

According to a Bloomberg report, some of the country’s biggest mortgage bond investors, including BlackRock,MetLife, and Pimco, will sue Ocwen, saying that the company failed to properly collect payments on $82 billion of home loans.

The group of investors sent a notice of non-performance to Ocwen and the trustees for 119 residential mortgage-backed securities trusts, stating that a lengthy investigation and analysis by “independent, highly qualified experts” determined that “Ocwen has failed to perform, in material respects, its contractual obligations as servicer and/or master servicer.”

The group of investors identifies several specific ways in which Ocwen failed as a servicer and broke its mortgage bond covenants, including:

  • Employing conflicted servicing practices that enriched Ocwen’s corporate affiliates, includingAltisource Portfolio Solutions (ASPS) and Home Loan Servicing Solutions (HLSS), to the detriment of the trusts, investors, and borrowers
  • Engaging in imprudent and wholly improper loan modification, advancing, and advance recovery practices
  • Failure to maintain adequate records, communicate effectively with borrowers, or comply with applicable laws, including consumer protection and foreclosure laws
  • Failure to account for and remit accurately to the trusts cash flows from, and amounts realized on, trust-owned mortgages

Read on.