As part of consent orders reached with multiple states, Ocwen Financial Corp. has agreed to transition away from its current mortgage servicing system and improve its servicing practices.
West Palm Beach, Florida-based Ocwen filed a Form 8-K report
Friday with the Securities and Exchange Commission indicating it reached consent orders with 10 states.
The agreements come five months after the Consumer Financial Protection Bureau, 30 states and the District of Columbia took legal or regulatory action against Ocwen over its servicing practices.
Those mortgage
and banking regulatory agencies alleged deficiencies in compliance with lending and servicing laws and regulations.
As part of the consent orders discussed in today’s filings, Ocwen agreed not to acquire any new mortgage servicing rights until April 30, 2018.
The agreements prohibit Ocwen from boarding any new loans on the REALServicing system and require it to utilize an alternative system.
If “Ocwen chooses to merge with or acquire an unaffiliated company or its assets in order to effectuate a transfer of loans from the REALServicing platform,” it has to provide public notice to applicable regulators.
Ocwen will need to engage a third-party firm to test 9,000 loan files. It will improve its servicing process and develop a borrower complaint handling process.
“Ocwen is pleased to have reached mutually agreeable resolutions with 12 states to resolve regulatory actions brought against the company in April 2017,” the company said in a written statement. “We continue to work
cooperatively with the remaining 19 state regulatory agencies and two state attorneys general, and are committed to seeking timely and acceptable resolutions with these states.”
Among the 10 states covered in today’s filing are
Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina and Wisconsin.
The Georgia Department of Banking and Finance issued a statement saying its consent order was the result of Ocwen Loan Servicing LLC failing to accurately reconcile consumer escrow accounts.
“The consent order provides that Ocwen will transition its servicing portfolio off of its current servicing platform to a platform better able to manage escrow accounts and establish a new complaint resolution process,” the Georgia statement said.
In Illinois, the Department of Financial and Professional Regulation, Division of Banking, said the consent order resolved a cease-and-desist order alleging unsafe, unsound and unlawful servicing conduct.
The department claims the REALServicing platform caused incorrect or delayed updating of servicing information and payments, late payment or forced-placement of borrowers’ insurance from escrow accounts; and improper handling of loan transfers.
Montana Division of Banking and Financial Institutions Commissioner Melanie Hall issued a statement saying she’s pleased about the agreement reached with Ocwen.
“The consent order allows both the division and the company to move forward with a focus on what specific steps need to be taken in order to provide consumers with accurate processing of their mortgage payments and for improved customer service in the future,” Hall stated.
In addition to the 10 states’ consent orders, cease-and-desist orders from Indiana and Nevada are no longer in effect, Ocwen said.
“In all of the above-described agreements, Ocwen neither admitted nor denied liability,” the filing stated.
Ocwen reached a $225 million settlement in February 2017 with the
California Department of Business Oversight, which had issued a consent order against Ocwen in early 2015.
