Embattled Ocwen expects another loss in 2017

by Ryan Smith23 Feb 2017
Ocwen is expecting to post a loss again in 2017 thanks to continued heat from regulators.

The nonbank has had a tough few years at the hands of regulators. A 2014 settlement with the New York Department of Financial Services (NYDFS) cost the company $150 million in fines and restricted its ability to acquire mortgage servicing rights in bulk. And a recent settlement with the state of California cost the company $225 million in penalties.

The company posted a net loss of $199.4 million in 2016, $246.7 million in 2015 and $546 million on 2014. And it looks now like 2017 might mark the company’s fourth straight year of net losses, according to a HousingWire report.

Much of the problem is tied to Ocwen’s restriction from purchasing bulk servicing rights. The company’s settlement with California allows it to acquire MSRs in that state, but it’s still bound by the prohibition from the NYDFS. Ocwen CEO Ron Faris told investors Wednesday that ending the consent order with the agency will be a top priority this year, HousingWire reported.

“With the California settlement, we are one step closer to re-entering the bulk MSR market,” Faris said. “But progress must occur soon if we are ever able to make a difference.”

Faris told investors that Ocwen’s servicing portfolio had seen a significant decrease under the restrictions. However, he said that in that time the company has made significant leaps in the quality of its operations.

“We believe we have earned the right ti be allowed to compete again,” he said.

However, the embattled company isn’t out of the woods yet. Ocwen is currently facing a Consumer Financial Protection Bureau investigation into its servicing practices. Faris said Wednesday that the company is expecting to post yet another loss in 2017.

“The regulatory risk and cost burden remains high,” Faris said.


Related stories:
CFPB probing Altisource over Ocwen relationship
Ocwen to pay $225 million over allegations of shoddy servicing

COMMENTS

  • by concerned | 4/21/2017 5:04:27 PM

    This servicer has been bad, very bad for a long time. This was not a big secret. They have had decades to turn it around, instead they kept spreading like a virus.

  • by Please Share my experience! | 4/22/2017 5:26:24 PM

    Ocwen bought servicing from GMAC with intent to deny modifications. A rep with Ocwen said Ocwen had no obligation to honor prior modifications made by IMPAC or original servicing entity GMAC. IMPAC solicited a default while GMAC was servicing the mortgage, promising lower interest rates in addition to charging a fee made directly to IMPAC reps to obtain modification with a low interest 8 yr ARM. They immediately transferred the mortgage from GMAC to Ocwen who declined to recognize the new modification. Some would say this is a RICO fraudulent scam since IMPAC's representatives actively used their 'holding' position to charge over thousand $$ for a modification knowing it was fraudulently obtained and would not be honored. This bogus origination fee went through IMPAC reps. IMPAC sold or handed off servicing to Ocwen, who played the 'heavy' in denying modification. GMAC was 'out of the picture' entirely in soliciting or originating a modification. This was a vicious deceptive scam with intent to defraud innocent home owners. It smacks of a RICO fraud against IMPAC, GMAC and Ocwen!

Poll

Is TILA-RESPA a good or bad thing long term?