Ocwen’s battle with regulators continues

by Ryan Smith26 Apr 2017
Ocwen Financial Corporation has filed emergency motions requesting injunctions and restraining orders against two state regulators. Ocwen has asked the courts to restrain the cease-and-desist orders brought against the embattled company by regulators in Illinois and Massachusetts.

Ocwen is hitting back after 22 states, in a coordinated effort, issued enforcement actions against it last week for alleged mortgage servicing violations. Most of the orders prohibited Ocwen from servicing any new accounts or originating any new mortgages. One state suspended the company’s operations completely within its borders. The same day, the Consumer Financial Protection Bureau announced it was suing the company over similar concerns.

In a statement emailed to MPA, Ocwen said it believes that the Illinois and Massachusetts orders “will cause significant harm to the consumers in those states, including potentially those consumers with pending mortgage applications, and those seeking loan modifications.”

“Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the Company,” Ocwen said.

Ocwen also said that it “plans to appeal or respond to each of the remaining state mortgage regulators’ actions in the coming days.”

But the company may have trouble keeping up as more states pile on with enforcement actions. On Monday, HousingWire reported that Indiana, Michigan and Maryland have also taken disciplinary actions against Ocwen for servicing violations.

Maryland accused the company of dialing to cooperate with the Multi-State Mortgage Committee, which investigated its servicing practices. The committee’s findings were a driving force behind the barrage of enforcement actions against the company. Maryland also accused Ocwen of unlicensed servicing activity, among other alleged violations. The state partially suspended the mortgage lender licenses of several Ocwen subsidiaries, according to HousingWire.

Michigan’s Department of Insurance and Financial Services also issued a cease-and-desist order against Ocwen for what it called the company’s “mishandling of Michigan consumer escrow accounts and a deficient financial condition.”

“Ocwen has a history of issues involving improper servicing and handling of escrow accounts,” said Michigan DIFS Director Patrick McPharlin. “Previous efforts to work with Ocwen to correct these problems have not been successful. That is why Michigan, along with other states, decided it was necessary to take this action.”

Indiana’s Department of Financial Institutions, meanwhile, said that Ocwen “has engaged in, or is engaging in, acts or practices which warrant the belief that the company is not operating honestly, fairly, soundly, and efficiently in the public interest and/or in violation of standards governing licensing, including violations of state and federal law.”

Indiana has issued an “emergency order of revocation” for Ocwen Loan Servicing’s first-lien mortgage-lending license, as well as its subordinate-lien mortgage-lending license, for 90 days, according to HousingWire.

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Ocwen woes continue as yet another state sues
Ocwen’s terrible, horrible, no-good, very bad day