Daily Archives: October 28, 2016

Ocwen facing CFPB investigation, potential fine for servicing practices

It’s been nearly three years since Ocwen Financial agreed to offer $2 billion in consumer relief and pay up to $127.3 million to settle a Consumer Financial Protection Bureau investigation into its servicing practices.

That settlement, and others with the New York Department of Financial Servicesand the California Department of Business Oversight, are among the items that Ocwen’s executives call the “legacy issues” that Ocwen is working to move past as the nonbank charts a course forward.

But it looks like Ocwen may not be done with the CFPB yet.

Ocwen said Thursday that it is currently under investigation by the CFPB over the company’s mortgage servicing practices, and could be facing a fine and/or other disciplinary action.

Ocwen disclosed the nature and status of the CFPB investigation in its 10-Q filing with the Securities and Exchange Commission, filed as part of the company’s third-quarter earnings release.

Ocwen disclosed the fact that it was facing a CFPB investigation in earlier filings with the SEC, but this latest filing states that the CFPB’s enforcement staff “has been authorized to engage with us regarding the resolution of their concerns” about Ocwen’s compliance with federal servicing laws.

Read on.

Warren, Sanders, other senators want answers from auditor KPMG on Wells Fargo

Wells Fargo is still answering for the more than 2 million fake accounts that 5,000 of the bank’s former employees opened in order to get sales bonuses, but now, a group of senators want to know if the bank’s auditor knew about the fake accounts too and whether the auditor did anything about it.

In a letter sent to KPMG, which served as Wells Fargo’s independent auditor from 2011-2015, Sens. Elizabeth Warren, D-Mass.; Bernie Sanders, I-Vermont; Mazie Hirono, D-Hawaii; and Edward Markey, D-Mass. say they want to know whether any of KPMG’s audits uncovered the fake account situation.

And if KPMG didn’t find anything about the fake accounts during its audits, the senators want to know why.

The senators question how KPMG’s audits, which were conducted by “obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,” did not uncover the fake accounts.

“Was KPMG aware of any of the illegal sales practices committed by Wells Fargo employees from 2011-2015 and addressed in the CFPB settlement?,” the senators ask in their letter to KPMG.

Read on.

ENRON stands unprecedented as the poster child of blatant corporate fraud

In 2001, Enron, then the seventh largest company in the world and the most innovative company in America, whose stock prices doubled every three years,  imploded. The American energy company based in Houston, Texas went from $100 billion in revenues and $1 billion in profit to bankrupt, leaving thousands out of work and with no pension plans as many had invested these back into the company, at the request of management.
My friend Sherron Watkins, a former VP of Corporate Development at Enron, became the key whistleblower at ENRON, when she alerted then-CEO Ken Lay to accounting irregularities within Enron in August of 2001, warning him that the company “might implode in a wave of accounting scandals.” Incidentally, ENRON had a 64 plus page ethics manual and did implode two months later.
As a result of misappropriated investments, pension funds, stock options, and savings plans, investors loss exceeded $70 billion and the cost to both trustees and employees upwards of $2 billion.
Regards,
Richard