The latest in the ongoing investigation of Ocwen Financial Corporation’s (NYSE: OCN) compliance with the National Mortgage Settlement revealed the company fell short in several key servicing metrics in the second half of last year, according to a recent report from the Office of Mortgage Settlement Oversight (OSMO).
Ocwen, which has been subject to scrutiny from OSMO on issues related to its servicing compliance since last year, failed four metrics in the second half of 2014, according to the report from Joseph Smith, Jr., monitor of the National Mortgage Settlement.
The metrics were related to the timeliness, accuracy and completeness of pre-foreclosure initiation notification letters sent to borrowers; compliance with servicing standards regarding the propriety of default-related fees collected from borrowers; and compliance with the requirements to notify borrowers of any missing documents within 30 days of a borrower’s request for a short sale.
A fourth failed metric tests whether the servicer sent a denial notification to a borrower that included the reason for the denial, the factual information considered by the servicer in making its decision, and a timeframe by which the borrower can provide evidence that an eligibility determination was made in error.
This report is the first that addresses Ocwen’s compliance on its entire portfolio, which includes both the loan portfolio acquired from Residential Capital, LLC and all other loans serviced by the company in its mortgage loan portfolio, said Smith in a written statement on his report findings.
Additionally, several metrics with timeline requirements were also deemed failures in the second half of 2014 as part of Ocwen’s Global Corrective Action Plan to address its incorrect dating of borrower correspondence.
“Ocwen and my professionals have continued reporting and testing on compliance for the first half of 2015, including providing updates on the status of the corrective action plans and the Global CAP, and their associated remediation plans,” Smith stated. “I will report on the results of those activities in the near future.”
Ocwen, which is the parent company of top-10 reverse mortgage lender Liberty Home Equity Solutions, says that the metrics mentioned in Smith’s report are not a reflection of its current operations.
“They [metrics] have all been addressed with Corrective Action Plans approved by OSMO and implemented by Ocwen in 2015,” Ocwen said in a statement issued Thursday. “We also note that the Monitor’s report specifically discusses that Ocwen has cured it potential violation regarding termination of lender-placed insurance and passed that metric during the cure period in the fourth quarter of 2014.”
“Ocwen is committed to being fully compliant with all rules and regulations related to our business, and we continue to invest in our risk and compliance management systems,” Ocwen stated. “We will continue to work closely with the Monitor and look forward to the next report.”
Written by Jason Oliva