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California's Department of Business Oversight is moving to halt Ocwen's operations in the state after the company failed to provide documentation about its compliance with California's Homeowner Bill of Rights. The bill prohibits certain mortgage servicing practices—such as dual-tracking—and sets in place requirements for single points of contact and document verification, among other provisions. Losing California would be a big blow to Ocwen, which serviced more than 378,000 home loans in the state valued at $95 billion in unpaid principal balance as of Q3 2014.
With the latest news, Ocwen is off to a less than promising start to 2015 after concluding what was a rocky 2014. The firm's most recent round of problems started early last year, when New York financial regulator Benjamin Lawsky announced a probe into the company's practices in response to its explosive growth and customer complaints. After months of concerns voiced by the FHFA, the Office of Mortgage Settlement Oversight, and various state agencies, Ocwen finally reached an agreement with Lawsky's office that saw the departure of founder Bill Erbey and a $150 million dollar settlement.
Keeping in line with Republicans' promises of more scrutiny of the Consumer Financial Protection Bureau, U.S. Representative Jeb Hensarling, a Republican from Texas, has written a letter urging the CFPB to abandon plans to renovate its office building in favor of more cost-effective alternatives. In the letter, Hensarling called plans to renovate CFPB headquarters in Washington, D.C. a "$215.8 million federal boondoggle." The current estimate to renovate the building has more than doubled since the original estimate of $95 million was issued.
