More woes for Ocwen as compliance failure leads to freeze on foreclosures

by Ryan Smith28 Apr 2016
Embattled loan servicer Ocwen Financial can add another problem to its long list of woes.

Just a day after posting a net loss of more than $111 million for the first quarter, the oft-sued servicer got some more bad news. According to a HousingWire report, Ocwen has failed to meet the terms of the National Mortgage Settlement and has been barred from taking foreclosure actions on more than 17,000 loans.

Joseph Smith, the National Mortgage Settlement monitor, said Ocwen still isn’t in compliance with a settlement performance metric that it failed in 2014. The metric tests whether a mortgage servicer sent a notification of loan modification denial to a borrower that included the reason for the denial, information the servicer considered in making its decision and a timeframe in which the borrower can prove that the decision was made in error, HousingWire reported.

According to Smith, Ocwen still isn’t meeting that requirement. Because of that failure, the servicer has to freeze foreclosure action on more than 17,00 loans that might have been affected.

“While Ocwen has made progress toward correcting a number of past fails, it has not resolved its issues that led to its failure of Metric 31,” Smith said. “Therefore, I will not allow Ocwen to move forward with foreclosures on any borrowers who could have been affected by this failure until each of these borrowers has correct information and a chance to appeal.”
 

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