Ocwen’s financial pain is just beginning.
The embattled mortgage servicer expects a “record loss” for the fourth quarter and full year because of penalties and higher servicing costs, the company warned on Thursday.
Ocwen will add $50 million more in legal expenses — on top of the $100 million it set aside in the third quarter — for costs tied to a probe by the New York Department of Financial Services, CEO Ron Farris said in a letter to shareholders.
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Wells Fargo (WFC) will pay a $4 million penalty after an investigation by the New York Department of Financial Services found that a former affiliate of the bank falsified mortgage loan origination files, made loans to customers that were secured by an interest in the borrower’s home, and committed other infractions in violation of New York State law.
According to the NYDFS, beginning in 2006, Wells Fargo Financial Credit Services of New York issued a series of home equity lines of credit to New York borrowers under the product name “Nowline Visa Platinum Credit Card Accounts.” The cards allowed borrowers to make retail credit card purchases that were secured by an interest in the borrower’s home, which is against the law in New York.
“Our investigation uncovered that this Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases – creating substantial and undue risks for consumers,” NYDFS Superintendent Benjamin Lawsky said. “This agreement will provide direct relief to New York consumers.”
Under the terms of the settlement agreement between Wells Fargo and the NYDFS, Wells Fargo will pay a $2 million penalty to the state of New York and will provide approximately $2 million in direct consumer restitution payments.
In addition to the HELOC violations, the NYDFS investigation also determined that Wells Fargo “altered and falsified” mortgage loan origination files by inflating borrowers’ income levels in order to facilitate qualifications that the borrowers would not have been qualified to receive otherwise.
As part of the agreement with the NYDFS, Wells Fargo must consider loan modifications for any borrower in default, foreclosure or facing “imminent default” whose loan documents were altered or falsified by Wells Fargo in order to secure a Nowline card.
Under the terms of the agreement, Wells Fargo must relinquish any security interest that it or any of its affiliates holds on the property of any Nowline Visa Platinum Credit Card customers in New York.
Law360, Los Angeles (February 04, 2015, 10:32 PM ET) — Federal authorities are investigating UBS AG for potentially helping Americans evading taxes through so-called “bearer securities” mostly prohibited in the U.S., about six years after the Swiss banking giant paid $780 million to resolve a similar international-tax dispute, according to a Wednesday report.
The U.S. Attorney’s Office for the Eastern District of New York is examining evidence collected with the FBI, to decide whether UBS employees helped facilitate tax evasion or participated in securities fraud, or if any employees engaged in criminal behavior by covering up…
Mortgage Machine Services, a provider of lending solutions, will start offering the source code to Mortgage Machine, its loan origination system, to the entire mortgage industry to help better prepare the market for the upcoming Consumer Financial Protection Bureau TILA-RESPA regulations.
“There are so many changes in compliance that have been hitting mortgage bankers,” said Jeff Bode, owner of Mortgage Machine Services. “We think this will save lenders quite a bit of time and money.”
The CFPB recently made changes to Regulation Z, which implements regulation for the Truth in Lending Act (TILA), and Regulation X, which covers the Real Estate Settlement Procedures Act (RESPA). Both go into effect Aug. 1.
Up until now, the Mortgage Machine Services solution was used by a select group of mortgage bankers, but the updated solution adds in more attractive features to appeal to lenders.