Ocwen hits back at regulators

by Ryan Smith24 Apr 2017
Ocwen Financial Corporation is hitting back after more than 20 state regulators, in a coordinated effort, issued enforcement orders against it.

On Thursday, more than 20 state regulators issued orders against the mortgage servicing giant – most of which prohibited it from servicing or originating new loans – for alleged widespread servicing defects including the mishandling of escrow accounts and operating unlicensed facilities. The orders would require Ocwen to reconcile all 2.5 million escrow accounts in question before resuming new business – a process that would cost $1.5 billion. Hours later, the Consumer Financial Protection Bureau announced it was suing the servicing giant over similar allegations.

But Ocwen is strongly denying the states’ charges. The company said in a statement Friday that it intends to “vigorously defend” itself against what it calls unfounded claims.

“As with the recent CFPB enforcement action, Ocwen strongly disputes the key allegations made in the State Regulators’ cease and desist orders that Ocwen’s mortgage loan servicing practices have caused substantial consumer harm,” the company said in the statement. “Ocwen will not sign unfair and unjust consent orders that make impractical demands that no other market participant could rationally accept, and which would harm consumers. Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the Company against unfounded claims while continuing to work with State Regulators to resolve any valid concerns.”

One of the state regulators’ main allegations against Ocwen was that it had mishandled customer escrow accounts – a charge the company vehemently denied.

“Ocwen’s escrow administration practices are subject to frequent review or examination by independent third parties acting on behalf of mortgage loan investors and rating agencies,” the company said. “These independent reviews have consistently confirmed Ocwen’s escrow practices are in line with common industry standards for timeliness and accuracy.”

Ocwen also dismissed regulators’ demand to review 2.5 million loan escrow accounts. The company had instead offered to review a sample of just 457 accounts – an alternative it said in its statement was “a statistically sound sampling methodology recommended by an independent third party.”

Ocwen also said it believes it is properly licensed in all the states where it operates. The company recently entered into settlements over the matter with three states, “without admitting or denying wrongdoing,” it said in the statement. The company also insisted that it had a good record of cooperation with state regulators.   

“Ocwen intends to vigorously defend itself against yesterday’s actions by State Regulators while at the same time working with State Regulators to find common ground to resolve differences,” the company said.

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Ocwen’s terrible, horrible, no-good, very bad day