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Ocwen Discloses Possible CFPB Action

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Ocwen Financial Corp. has revealed that it is working with the Consumer Financial Protection Bureau to avoid actions that could have a material impact on the company.

In a Securities and Exchange Commission filing, Ocwen said it previously disclosed the receipt of several civil investigative demands, or investigative subpoenas, from the CFPB.

The demands from the regulator seek to obtain information about the
West Palm Beach, Florida-based organization’s residential loan servicing practices.

That was
followed by a Notice and Opportunity to Respond and Advise letter from the CFPB. The notice indicated that the CFPB’s office of enforcement is considering recommending that legal action against Ocwen relating to compliance with federal laws pertaining to servicing practices.

In addition, the notice gave Ocwen
an opportunity to make a NORA submission — a written statement setting forth reasons of law, policy and fact as to why it doesn’t believe such action is appropriate — which Ocwen did.

“Subsequently, we have been informed that the enforcement staff has been authorized to engage with us regarding the resolution of their concerns, which could result in a consent order and could entail payment of monetary amounts by us or injunctive relief,” the filing states. “If we are unable to resolve such concerns, and the CFPB were to bring an enforcement action against us, such action could have a material adverse impact on our business, reputation, financial condition and results of operations.”

The filing indicated that Ocwen originated $1.429 billion in residential loans during the third quarter, including $1.216 billion in forward loans and $0.213 billion in reverse mortgages.

For all three quarters of 2016, production totaled $3.729 billion, including $3.118 billion in forward mortgages and $0.611 billion in reverse mortgages.

The primary residential loan servicing portfolio
stood at $206.615 billion as of Sept 30, while the subservicing portfolio was $10.277 billion.

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