In a release, Superintendent Benjamin Lawsky said a review of Ocwen's business showed that ""in some instances, the company failed to demonstrate that it had sent out required 90-day notices before commencing foreclosure proceedings or even that it had standing to do bring the foreclosure actions.""
The exam also found that Ocwen sometimes failed to provide a single point of contact for borrowers, pursued foreclosure actions on borrowers seeking loan modifications, failed to conduct an independent review of loan mod denials, and failed to ensure that borrower and loan information was accurate and up to date.
Ocwen was the first mortgage servicer to agree to the department's new Mortgage Servicing Practices in 2011, but Lawsky says simply agreeing to reform your business is not enough.
""The best unrealized reforms won't protect homeowners. To protect homeowners facing the risk of losing their homes, we must ensure that the companies are actually living up to their promises,"" Lawsky said. He added that the examination of Ocwen's servicing practices came about after the department received complaints about the company.
Following the examination, the department is now requiring that Ocwen hire an independent monitor to review its operations and identify and report on corrective actions. Ocwen has 20 days from the execution of the consent order to do so.
The requirement may slow down Ocwen's recent efforts to expand its servicing portfolio. Since 2011, the company has acquired portfolios from several major servicers, most of which contained distressed loans. In October, Ocwen and Walter Investment Management Corp. won in a joint $3 billion bid to acquire the assets of the bankrupt Residential Capital, LLC (ResCap). Ocwen also announced in October its intent to purchase Homeward Residential Holdings, Inc. in a $750 million deal. Those deals have not yet seen regulatory approval.
Ocwen did not immediately respond to a request for comment.