Ocwen Financial Corporation (NYSE: OCN) on Wednesday reported a pair of positive regulatory developments, inking three more agreements to shed mortgage-servicing restrictions and getting an all-clear message from the Securities and Exchange Commission (SEC).
The West Palm Beach, Fla.-based servicer reached deals with the states of New Mexico, Virginia, and West Virginia, which will allow Ocwen to begin acquiring mortgage servicing rights again after April 30. Those three states were part of a massive 21-state-plus-Washington, D.C. enforcement action handed down this spring, stripping Ocwen of its ability to originate and service loans amid problems with its handling of escrow accounts and financial data.
The company took the first step toward lifting the bans last week, announcing deals with 10 states to restore its servicing rights. Under the terms of those agreements, largely similar to the ones announced today, Ocwen will be required to replace its beleaguered REALServicing platform with new software, hire a third-party auditor to probe a representative sample of its escrow accounts, and submit a plan to overhaul its consumer-complaint process.
“Ocwen is pleased to have reached resolutions with three additional states to resolve regulatory actions brought against the company, bringing the total number of states where we have reached a resolution to 15,” company spokesman John Lovallo said in a statement.
Two other states either allowed their initial bans to lapse or rescinded the orders, according to Ocwen.
Ocwen originates and services reverse mortgages under its Liberty Home Equity Solutions arm, though Liberty was generally not involved in the bans; only Illinois authorities named the entity in its orders, but officials indicated that it was only designed to prevent Ocwen from originating forward loans through its other companies.
In a separate case, Ocwen announced that the SEC has closed an investigation into the handling of Home Equity Conversion Mortgage-backed securities (HMBS) and use of collection agencies by servicers. The SEC’s New York regional office had been probing the company and other servicers since 2015, but on October 2 sent Ocwen a letter indicating that both investigations have concluded with no enforcement actions against the company.
Ocwen stock closed Wednesday’s trading flat at $3.60 per share.
Written by Alex Spanko