Ocwen is continuing its efforts to reach accords with the states that took regulatory action against it earlier this year. The company has now announced that it has reached a settlement with Texas.
In May, Texas slapped the servicer with an order preventing it from acquiring servicing new rights and originating new mortgages within the state’s borders. Texas was one of 30 states – plus the District of Columbia – to issue regulatory enforcement orders against the servicer in rapid succession. The states alleged that Ocwen had mishandled customer escrow accounts. Many state orders effectively crippled the company’s ability to do business within the states that issued them.
The servicer has recently started settling the complaints. It announced its settlement with Texas Thursday in a filing with the Securities and Exchange Commission. According to the terms of Ocwen’s various settlements:
- Ocwen will not acquire any new residential mortgage servicing rights until April 30, 2018
- The company will transition from its current proprietary servicing system, REALServicing, to an alternate system and not board any new loans on REALServicing
- Ocwen will engage a third-party auditor to analyze its compliance with federal and state escrow laws
- It will develop corrective action plans for any errors identified by the auditor and submit those plans for review
- If will develop a plan to enhance its consumer complaint-handling process
- It will provide financial reporting as part of each state’s supervisory framework for the next three years
Ocwen has also agreed to make some “additional communications with and for Texas borrowers, as well as certain review and reporting obligations,” the company said in its SEC filing.
“Ocwen is pleased to have reached a resolution with Texas, which brings the total number of states where we have reached a resolution to 21,” Ocwen spokesperson John Lovallo said in an email to MPA. “We continue to work cooperatively with the remaining 10 state regulatory agencies and two state attorneys general to reach acceptable resolutions.”
Ocwen has neither admitted nor denied liability in its settlements so far.