Right as Ocwen Financial fixed previous compliance failures, the servicer is hit with two new compliance failures, according to the latest oversight report on Ocwen from the office of Joseph Smith, who is the monitor of the National Mortgage Settlement.
In the last report from the NMS, Ocwen failed to be back in compliance with one of the performance metrics of the National Mortgage Settlement that it failed in the second half of 2014. And because of those issues, Ocwen had to place 17,300 loans that “could have been affected” by this issue on foreclosure hold.
These issues are now resolved, according to the latest report.
Smith’s office permitted Ocwen to lift the foreclosure sale hold in July 2016 after it mailed corrected loan modification denial notices to affected borrowers and provided a sufficient timeframe for the borrower to appeal the denial.
The Monitor of the Chase RMBS Settlement Joseph Smith officially credited Chase with providing $3,887,777,119 of consumer relief to 165,191 borrowers.
Through the third quarter 2015, JPMorgan Chase provided $206,242,520 in consumer relief to 3,389 borrowers.
This brings the bank extremely close to its required $4 billion in credited consumer relief by Dec. 31, 2017.
This is the eighth progress report on Chase’s consumer relief under its settlement with the federal government and five states concerning claims that Chase, Bear Stearnsand Washington Mutual packaged and sold bad residential mortgage-backed securities to investors before the financial crisis.
In a lengthy response published Thursday afternoon, Ocwen responded to Smith’s office and the nature of the sanctions that Smith’s office placed on it.
Ocwen notes that the issue at hand originally occurred in the third quarter of 2014.
“Ocwen takes borrower harm very seriously and worked with Office of Mortgage Settlement Oversight to place certain loans on a hold to ensure that no foreclosure sale would take place until OMSO reviewed and validated that all matters associated with Metric 31 were resolved,” the company said in a statement.
“The Monitor’s report today further noted it has approved the corrective action plan for Metric 31, and that Ocwen reported completing all implementation of that plan as of March 8, 2016,” Ocwen continued.
“These holds are not ‘frozen foreclosures’ but rather an agreement not to foreclose until OMSO reviewed and approved Ocwen’s remediation,” Ocwen continued. “Many of these loans have never been referred to foreclosure and never will be. The Company has already resumed internal testing of Metric 31, and expects future OMSO reports will reflect that its concerns are resolved.”
According to Ocwen, it referred over 19,000 loans to foreclosure and completed approximately 7,000 foreclosures in the first quarter of 2016, while completing more than 16,600 loan modifications.
As it turns out, it can get worse for Ocwen Financial. Less than one day after posting a massive loss for the first quarter of 2016, the nonbank has run afoul of the terms of the National Mortgage Settlement and is now forbidden from taking foreclosure actions on more than 17,000 loans.
According to Joseph Smith, the monitor of the National Mortgage Settlement, Ocwen is not yet back in compliance with one of the performance metrics of the National Mortgage Settlement that it failed in the second half of 2014.
BofA, Chase, Citi, Wells Fargo, Ditech now done
The original National Mortgage Settlement servicers officially completed the final metric tests as of the end of third quarter ] 2015, marking the completion of the NMS rules for the servicers, Joseph Smith, Monitor of the National Mortgage Settlement, announced on Thursday.
The original servicers include: Bank of America, Chase, Citi and Wells Fargo.Ditech acquired a portion of the portfolio from another original servicer, ResCapParties and therefore was subject to the terms of the NMS agreement.
The latest update on JPMorgan Chase’s RMBS settlement shows it is nearing its $4 billion requirement in credited consumer relief.
National Mortgage Settlement Monitor Joseph Smith credited JPMorgan Chase with providing $126 million in consumer relief to 3,696 borrowers through the second quarter of 2015.
As a result, this brings the total amount of consumer relief the monitor has credited to $3.68 billion for 161,802 borrowers.
I filed a compliance report with the United States District Court for the District of Columbia (the Court) today that provides the results of my tests on Ocwen’s compliance with the National Mortgage Settlement (Settlement or NMS) servicing standards during the third and fourth calendar quarters of 2014. This report is the first that addresses Ocwen’s compliance on its entire portfolio, which includes both the loan portfolio acquired from the ResCap Parties and all other loans serviced by Ocwen in its mortgage loan portfolio.1
Ocwen failed four metrics in the second half of 2014. In addition, several metrics with timeline requirements were deemed failures in that time as part of Ocwen’s Global Corrective Action Plan (Global CAP) to address its incorrect dating of borrower correspondence. In all, ten metrics were subject to individual corrective action plans (CAP), the Global CAP or both as of the fourth quarter 2014.
This report covers the results of my professionals’ testing of Ocwen’s performance in the second half of 2014 and the development and implementation of the corrective action plans and Global CAP. Ocwen and my professionals have continued reporting and testing on compliance for the first half of 2015, including providing updates on the status of the corrective action plans and the Global CAP, and their associated remediation plans. I will report on the results of those activities in the near future.
Joseph A. Smith, Jr.
FOR IMMEDIATE RELEASE
Wednesday, September 30, 2015
Service Members’ Compensation for Unlawful Foreclosures Under the Servicemembers Civil Relief Act Rises to $311 Million
The Justice Department announced today that an additional 1,461 service members and their co-borrowers are eligible to receive over $186 million for home foreclosures under the department’s settlements with five of the nation’s largest mortgage servicers. Those settlements implement the protections of the Servicemembers Civil Relief Act (SCRA). Together with other foreclosure-related compensation announced by the department in February, a total of 2,413 service members and their co-borrowers are eligible to receive over $311 million. The five mortgage servicers are JP Morgan Chase Bank N.A. (JP Morgan Chase); Wells Fargo Bank N.A. and Wells Fargo & Co. (Wells Fargo); Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc. (Citi); GMAC Mortgage LLC, Ally Financial Inc. and Residential Capital LLC (GMAC Mortgage); and Bank of America N.A., Countrywide Home Loans Inc., Countrywide Financial Corp., Countrywide Home Loans Servicing L.P. and BAC Home Loans Servicing L.P. (Bank of America).
The compensation results from the SCRA portion of the 2012 settlement known as the National Mortgage Settlement (NMS) and an earlier settlement with Bank of America, for foreclosures that took place between Jan. 1, 2006, and Apr. 4, 2012, where the servicer obtained a foreclosure without a judicial proceeding or where the servicer obtained a default foreclosure judgment without filing a proper affidavit with the court stating that the service member was in military service.
Chase credited with $3.6B in consumer relief
Here is a snapshot of the update consumer relief
Click to enlarge
(Source: Joseph Smith)
National Mortgage Settlement Monitor Joseph Smith credited Chase with $3,555,280,673 in consumer relief to 158,107 borrowers through March 31, 2015.
This is Smith’s sixth report on JPMorgan Chase’s (JPM) progress on its settlement with the federal government and five states concerning claims that Chase,Bear Stearns and Washington Mutual packaged and sold bad residential mortgage-backed securities to investors before the financial crisis.
“We continue to help thousands of families become homeowners and assist those who may be struggling. We have helped nearly 162,000 families through more than $19 billion in total mortgage relief,” JPMorgan said in a statement.
Chase also self-reported consumer relief credit for the second quarter of 2015. As of June 30, 2015, Chase claimed an additional $126,253,926 in consumer relief.
Ocwen Financial (OCN) is almost out of the clear with theNational Mortgage Settlement after more than a year of scrutiny due to problems with the servicer’s Internal Review Group (IRG).
“After a review of the issues I found with Ocwen’s IRG’s integrity and subsequent review of its work to address these problems, I have reported to the Court that I now have a measure of assurance that the issues with Ocwen’s IRG’s independence, competency and capacity have been sufficiently addressed,” said Joseph Smith, Jr., Monitor of the National Mortgage Settlement.