Ocwen Can’t Foreclose on Some Loans

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Ocwen Financial Corp. has been told to hold off on foreclosures for a group of distressed borrowers who weren’t properly notified about loan modification denials.

The suspension relates to the Atlanta-based company’s performance on requirements under the national mortgage servicer settlement reached in February 2012.

Ocwen has made progress correcting a number of areas that it previously failed in, the servicer came up short on a required letters for modification denials.

That is according to Monitor of the National Mortgage Settlement
Joseph A. Smith Jr.

In an announcement Wednesday, Smith noted that
Ocwen hasn’t resolved issues that led to its failure on Metric 31.

That metric tests whether servicers sent loan modification denial letters to borrowers that included the reason for the denial, factual information considered in denying the modification and a time frame for the borrower to provide proof that the decision was made in error.

In Ocwen’s case, it was delayed in implementing
a corrective action plan for Metric 31.

“Ocwen’s delays appears to be related to difficulties in resolving certain technical issues that originally led to this metric failure,” Smith wrote in a report.

Even though Ocwen has
provided 23,000 borrowers with more than $2 billion in consumer relief and fulfilled its consumer relief obligation under the settlement, Smith is taking action to resolve the failure in Metric 31.

“Therefore, I will not allow Ocwen to move forward with foreclosures on any borrowers who could have been affected by this failure until each of these borrowers has correct information and a chance to appeal,” Smith stated. “Despite its progress, Ocwen continues to have work to do.”

Mortgage Expert

Mortgage Daily Staff



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