Dec 5 A New York state regulator said it has
ordered Ocwen Financial Corp to hire a monitor to make
sure the growing mortgage servicer complies with a previous
agreement to reform its practices.
The New York Department of Financial Services on Wednesday
said it imposed the requirement after an examination found signs
that Ocwen was violating the agreement. The monitor will be in
place for two years.
In September 2011, Ocwen was the first mortgage servicer to
agree to follow the department's new mortgage servicing
requirements, which aimed to prevent the so-called robo-signing
of foreclosure documents and other improper practices.
In its examination, the department said it found instances
where Ocwen failed to show it had sent required 90-day notices
before starting foreclosure proceedings or that it had standing
to foreclose. The regulator also had other concerns about the
company's servicing practices, including indications that it had
failed to provide some borrowers with a single point of contact
for communicating with the company.
Ocwen did not immediately respond to a request for comment.
The Atlanta-based company has been expanding rapidly through
acquisitions as banks such as Morgan Stanley and Goldman
Sachs Group Inc back away from a business that burned
them during the financial crisis. Mortgage servicers collect
payments from borrowers and help them modify their loans when
they fall behind on the their payments.
Earlier this month, the servicer agreed to buy mortgage
lender Homeward Residential Holdings from Wilbur Ross' private
equity firm for $750 million in cash and stock. In October,
Ocwen and Walter Investment Management Corp prevailed in
a bankruptcy auction for Residential Capital LLC's mortgage
business with a $3 billion bid that topped rival Nationstar
Mortgage Holdings Inc. [ID: nL1E8LO71V]
Mortgage servicers have been under fire from regulators for
their poor handling of foreclosures and loan modifications since
the U.S. housing market cratered. In February, five large banks
reached a $25 billion settlement requiring them to reduce loan
balances for borrowers and to reform servicing practices.
The Wall Street Journal on Tuesday first reported that New
York's banking regulator had concerns about Ocwen's practices.