By Colleen M. Svelnis, J.D.
The California Department of Business Oversight (DBO) has announced a resolution to the ongoing actions it has been pursuing against Ocwen Loan Servicing, LLC. For more than a year, the state department has sought loan information from Ocwen in order to assess the company’s compliance with California’s laws protecting homeowners; however, Ocwen has failed to provide proof of compliance with the state’s mortgage lending laws. Under the $2.5 million settlement, the California DBO will retain the ability to pursue an enforcement action against Ocwen if its examination of the loan files uncovers substantive violations of mortgage lending laws.
California DBO Commissioner Jan Lynn Owen said that the settlement “allows us to move forward and ensure that Ocwen is meeting its obligations under the law.” “The Department is committed to supporting a fair and secure financial services marketplace for all California consumers,” she continued.
Ocwen also filed a Form 8-K with the Securities and Exchange Commission to notify investors of the settlement.
Settlement terms. Under the terms of the settlement:
Ocwen will pay for an independent third-party auditor, selected by the California DBO, to ensure that Ocwen provides all the information the California DBO has requested from loan files;
Ocwen must pay $2.5 million in penalties within 10 days and cover the California DBO’s administrative costs associated with the case; and
Ocwen is also prohibited from taking on any new California customers until the California DBO determines the firm will be able to respond in a timely manner to future requests for information.
In addition, the California DBO will drop its effort to suspend Ocwen’s license to operate in California (see Banking and Finance Law Daily, Jan. 14, 2015).
Auditor report. The third party auditor must submit a report on Ocwen’s compliance with the California Residential Mortgage Lending Act, the 2012 Homeowner Bill of Rights, and other state and federal laws and regulations.
Companies: Ocwen Financial Corp.; Ocwen Loan Servicing, LLC
MainStory: TopStory CaliforniaNews ConsumerCredit EnforcementActions Loans Mortgages
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