On Tuesday, Ocwen [1] Financial filed two emergency motions requesting the immediate court action restraining the cease and desist order brought by the Illinois Department of Financial and Professional Regulation, Division of Banking and the Commissioner of Banks of the Massachusetts Division of Banks.
Ocwen believes that the Illinois and Massachusetts orders will cause significant harm to the consumers in those states, including potentially those consumers with pending mortgage applications and those seeking loan modifications.
“Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the Company,” Ocwen said in a statement.
The cease and desist orders from Illinois and Massachusetts came on the same day the Consumer Financial Protection Bureau filed a complaint against Ocwen, claiming that servicing failures within the firm had harmed borrowers. Ocwen has denied the allegations.
The recent events have caused Fitch Ratings to alter Ocwen’s RMBS Servicer Rating from Stable to Negative. In a statement released in response to the CFPB’s allegations Ocwen said: “The substantive allegations in today’s suit are inaccurate and unfounded. Indeed, the Company is unaware of the CFPB conducting any detailed review of Ocwen’s loan servicing files. The CFPB suit is primarily based on the CFPB’s flawed review of data and its self-serving conclusion about isolated instances where Ocwen self-identified ways we can do better.”
Within the next few days, Ocwen plans on appealing or responding to each of the state mortgage regulator actions. “Ocwen remains committed to working with Illinois, Massachusetts, and other state regulators to resolve any valid concerns, and has commenced those efforts.”
In their statement, Ocwen noted that the allegations from the state regulators did not come from a recent assessment, but from a 2015 multi-state examination of Ocwen’s mortgage servicing business which covered activity between January 2013 to February 2015.