A $225 million settlement with the state of California resolves a consent order that was reached in early 2015 with an Ocwen Financial Corp. unit.
In January 2015,
the California Department of Business Oversight sought to suspend the mortgage licenses of Ocwen Loan Servicing LLC.
The action, taken because it allegedly failed to comply with requests for documentation, jeopardized the servicing of $94 billion of loans in the state.
Later that same month, though, Ocwen reached a consent order that resulted in a withdrawal of the
request to suspend Ocwen’s licenses.
On Friday,
the Department of Business Oversight announced that a $225 million settlement was reached with the West Palm Beach, Florida-based firm.
The agreement requires a $20 million cash payment for borrower restitution and $5 million for penalties, attorney fees and the costs of an administrator to oversee the restitution payments. It also requires that Ocwen provide borrowers $198 million in debt forgiveness through loan modifications over three years.
The remaining $2 million came from payments already made to 3,127 distressed California borrowers harmed because they didn’t receive
required letters on the dates shown on the letters.
As a result of the settlement, Ocwen ability to service new California mortgages has been restored.
“Ocwen is pleased to have reached a comprehensive settlement with the DBO related to matters the agency raised, and we will quickly move forward to implement all terms associated with this agreement,” Ocwen President and Chief Executive Officer Ron Faris said in a written statement. “The settlement resolves claims between Ocwen and the DBO without the company admitting to any wrongdoing, and will allow us to focus on our business going forward, while reducing a significant expense by terminating the engagement of the independent auditor.”
