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DS News Webcast: Monday 11/17/2014

Wells Fargo and Ocwen Financial have mutually agreed to cancel the sale of billions of dollars residential mortgage servicing rights after New York's top financial regulator put the deal on hold. San Francisco-based bank Wells Fargo, the nation's top mortgage lender, had agreed to sell $39 billion worth of mortgage servicing rights to Atlanta-based Ocwen, the nation's largest non-bank mortgage servicer, early this year. In February 2014, the transaction was delayed indefinitely by Benjamin Lawsky, head of New York's Department of Financial Services, citing a conflict of interest between Ocwen and its vendors.

Ocwen's activities have come under extreme scrutiny from financial regulators in the last year, resulting in millions of dollars in fines and penalties. In December 2013, the Consumer Financial Protection Bureau ordered Ocwen to pay $2 billion in relief to underwater borrowers plus $125 million in refunds to foreclosure victims over a series of alleged servicing errors and illegal servicing activities. Last month, the New York DFS accused Ocwen of sending 7,000 backdated foreclosure notices to borrowers.

While foreclosure activity in the U.S. spiked by 15 percent from September to October, the largest monthly increase in four years, 10 states still saw a month-over-month decline in foreclosures in October, according to RealtyTrac's October 2014 U.S. Foreclosure Market Report released earlier this week. The state with the largest month-over-month decrease in foreclosures for October was New Jersey, at 41.8 percent. The decline dropped the Garden State from third down to ninth for highest foreclosure rating among states.

About Author: Jordan Funderburk

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