California Moving to Suspend Ocwens

Mortgage License
Author: Tory Barringer in Daily Dose, Government, Headlines, News, Servicing January 13, 2015 1 Comment

Updated to included comments

from Ocwen.
Ocwen Financial Corp.'s already difficult regulatory situation grew worse this week
after news broke that a California state agency is seeking to have the company's
mortgage license suspended.
The LA Times was the first to report Tuesday morning that 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, which went into law at the start of 2013, prohibits
certain mortgage servicing practicessuch as dual-trackingand sets in place
requirements for single points of contact and document verification, among other
provisions.
Department spokesperson Tom Dresslar confirmed the report, saying that Ocwen's
lack of response comes despite repeated requests from the state.
"We're the regulator, and we have a responsibility to consumers to ensure that our
licensees are complying with laws," Dresslar told MReport. "They're not providing us
the information we need to do our job."
Dresslar explained that if Ocwen's license is suspended, the company would be given
a "reasonable transition period" to find alternative servicers for its existing portfolio.
It would not be allowed to take on new loans.
If Ocwen turned over the information the department is seeking, "We'd have to
determine at that point how to proceed," he added. For the time being, the company
has asked for a hearing, which is currently set for July.
Losing California would be a big blow to Ocwen, which serviced more than 378,000
home loans in the state valued at $95 billion unpaid principal balance as of Q3 2014,
according to MarketWatch.Shares for the company plummeted in early trading
Tuesday, falling off by more than 33 percent before ticking back up slightly.
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 Federal Housing Finance Agency, 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 monetary settlement.

Throughout all the troubles of the last year, Ocwen continually pledged to work with
regulators to dispel their concerns.
In a statement, Ocwen president and CEO Ron Faris said the company has dedicated
"substantial resources" toward satisfying the state's request and believes it has
provided the necessary information. He also pointed to Ocwen's efforts to help
California's homeowners, including the completion of 13,000 loan modifications and
3,500 short sales in 2014.
"We expect that we will receive follow up requests or clarifications and that further
document and information exchanges may take place," Faris said. "We expect our
ongoing cooperation will result in a satisfactory outcome for all parties.