Ocwen Financial Corporation and the California Department of Business Oversight (DBO) came to terms Friday on a 2015 issue that restricted the company’s ability to acquire mortgage servicing rights in the state.
Ocwen will pay $25 million an additional $198 million in debt forgiveness through loan modifications to existing California borrowers over a three year period. In exchange, California will lift its restriction on Ocwen and terminate the use of the independent auditor that was in place under the prior Consent Order.
Ocwen admitted to no wrongdoing in the settlement.
The case revolved around accusations by the DBO from January 2015 that the mortgage giant improperly billed and collected payments on mortgages in the state. California claimed the company did not comply with requests for information and threatened to suspend Ocwen’s licence in the state. That action temporarily rocked the company’s stocks.
Ocwen and the DBO came to a settlement later that month in which the company paid $2.5 million plus administrative costs in exchange for the state dropping its suspension threat. But a larger investigation into the company stretched on for two years until Friday’s settlement.
“Ocwen is pleased to have reached a comprehensive settlement with the DBO related to matters the agency raised, and we will quickly move forward to implement all terms associated with this agreement,” said Ron Faris, president and CEO of Ocwen. “The settlement resolves claims between Ocwen and the DBO without the company admitting to any wrongdoing, and will allow us to focus on our business going forward, while reducing a significant expense by terminating the engagement of the independent auditor.”
Ocwen remains one of the largest mortgage servicing and foreclosure prevention companies in the United States.. Since January 1, 2008, the company claims to have granted more than 720,000 loan modifications.
“Since 2008, Ocwen has helped more than 91,000 California homeowners avoid foreclosure through loan modification programs,” Faris said. “A homeowner whose loan is serviced by Ocwen has a much better chance of avoiding foreclosure than if their loan is serviced by other large mortgage servicers. This has been confirmed by numerous independent third-party studies, which consistently find that Ocwen has a superior record helping borrowers bring their payments current, stay current, and repay their mortgage.”