Settlement stipulates that Ocwen will pay $500,000 fine if it doesn’t comply
Ocwen Financial is one step closer to ridding itself of the mortgage servicing restrictions placed on the nonbank last year when 31 states took regulatory actions over alleged escrow and other servicing issues.
Ocwen disclosed late Thursday in a filing with the Securities and Exchange Commission that it reached a servicing settlement with the state of Connecticut, which brings the total number of settlements to 28 of the 31 jurisdictions that brought regulatory action against the nonbank last year.
The first round of settlements included Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina, and Wisconsin. Then came New Mexico, Virginia, West Virginia; followed by Alabama and Minnesota; then Arkansas, Tennessee, and the District of Columbia; then Texas; Hawaii; Nebraska, Oregon and Wyoming; and most recently, North Carolina and South Dakota.
According to Ocwen’s SEC filing, the settlement with Connecticut is “similar” to many of its earlier agreements with other states, previous settlements, which prohibit the nonbank from acquiring any new residential mortgage servicing rights until April 30, 2018.
Previous settlements also stipulated that Ocwen develop a plan to move away from REALServicing, Ocwen’s proprietary platform that is used to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information.
That plan will be achieved by Ocwen moving its servicing to Black Knight’s platform, a deal that was announced in early November.
But, the Connecticut settlement also has some terms that are different than the previous settlements.
According to Ocwen, the Connecticut settlement also requires the company to provide “certain additional communications with and for Connecticut borrowers,” as well as “certain review and reporting obligations.”
The settlement also stipulates that Ocwen will be required to pay a fine of $500,000 if does not comply with “certain” terms of the settlement.
As Ocwen notes in its filing, it is continuing to seek resolutions with the three remaining regulatory agencies and two state attorneys general that brought regulatory action against the company.