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Mortgage

Texas orders Ocwen to stop acquiring new mortgage servicing rights

Ordered to cease and desist

The Texas Department of Savings and Mortgage Lending recently ordered Ocwen Financial Corporation to cease and desist, adding its name to a growing list of states and regulators coming after the mortgage servicer over alleged violations of state and federal law.

According to the order, as first reported by Kristen Mosbrucker with the San Antonio Business Journal, “The Savings and Mortgage Lending Commissioner having determined Ocwen Loan Servicing, LLC, has engaged in, or is engaging in, or is about to engage in, acts or practices constitution violations of state and federal law and applicable regulations, hereby issues the following finding of facts and order to cease and desist.”

The Texas Department of Banking did not respond to HousingWire's request for the cease and desist earlier this week. The Order itself dates back to late April.

The cease and desist requires Ocwen Loan Servicing to immediately cease acquiring new residential mortgage servicing rights secured by residential real estate located in Texas, and acquiring or originating new residential mortgages serviced by it.

A spokesman for Ocwen provided the following response:

"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.

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."

The cease and desist from Texas comes amid a string of lawsuits at federal and state levels.

The Consumer Financial Protection Bureau recently sued Ocwen, accusing the nonbank of “failing borrowers at every stage of the mortgage servicing process.”

In its lawsuit, the CFPB claims that Ocwen illegally foreclosed on borrowers, ignored customer complaints, mishandled borrowers’ money, and failed at the most basic of mortgage servicing actions.

Ocwen answered those charges and accused the CFPB of playing politics with its lawsuit, stating that the bureau is simply seeking to distract from the legislative battle over the agency taking place on Capitol Hill as we speak.

And on top of the CFPB, a raft of state regulators, this Texas one included, clamped new business restrictions on Ocwen Financial for alleged rampant errors with homeowners’ escrow accounts and other issues at the nonbank.

For added guidance, here’s a detailed breakdown of Ocwen's new restrictions by state.

In the aforementioned statement, Ocwen also point edto the vast amounts of favorable servicing completed at the company, as well:

"Since January 1, 2008, Ocwen has granted over 735,000 loan modifications nationwide, and specifically in Texas more than 48,555 loan modifications, with approximately 17.8% percent of these modifications including principal forgiveness totaling more than $132.7 million, or on average $15,380 per loan.

Ocwen plans to appeal or respond to each state mortgage regulator actions, and continues to seek an acceptable resolution to resolve all state concerns."

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