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OCC Delivers Consent Order Against Cenlar

The Office of the Comptroller of the Currency (OCC) has announced that it has issued a Consent Order against Cenlar FSB of Ewing, New Jersey. The OCC accuses the bank of failure to establish effective controls and risk management practices related to Cenlar’s mortgage servicing and subservicing activities.

Cenlar, the second largest mortgage servicer in the nation, services portfolios representing billions of dollars in residential mortgages for clients nationwide. The company has more than 100 years of experience in the servicing industry, with decades focused exclusively on subservicing.

The OCC’s order requires Cenlar to take comprehensive corrective actions to address identified deficiencies and implement internal controls and risk management practices appropriate to the bank’s risk profile, and the size of its mortgage subservicing operations. The order also limits excessive growth and prioritizes remediation by requiring the bank to receive no supervisory objection from the OCC before adding new subservicing clients and prior to declaring or paying dividends to shareholders while the order is effective.

“This action requires Cenlar to improve: risk oversight, internal controls and preventative testing related to default, servicing operations and information technology that is appropriate for an organization with our current risk profile and a mortgage subservicing portfolio of our size,” said Cenlar’s Board of Directors in a statement. “We take seriously our regulatory obligations, and we are working with the OCC to make any changes necessary to resolve their concerns. We will continue to serve clients and their customers with our constant commitment to care and excellence as we make improvements to our risk management and control processes. Cenlar is and remains a profitable financial institution with strong capital and liquidity, and has successfully served clients for more than 25 years.”

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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