The dominoes continue to fall for Ocwen Financial.
Last week, Ocwen reached settlement agreements with a total of 10 states that remove some of restrictions that were placed on their mortgage business as part of a multi-state regulatory action against the nonbank earlier this year.
And Wednesday morning, Ocwen announced that over the last week, it reached settlements with three additional states to remove each state’s mortgage servicing restrictions.
Ocwen also announced that the Securities and Exchange Commission concluded two different examinations of the nonbank’s business, and said that the agency will not be seeking enforcement actions in either matter.
Ocwen’s new settlements are with the states of New Mexico, Virginia, and West Virginia.
Previously, the nonbank reached settlements with Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina, and Wisconsin.
Many of the states previously took regulatory actions against Ocwen over alleged escrow issues by restricting Ocwen’s ability to acquire new mortgage servicing rights and originate new loans in each state.
These new settlements contain similar terms as the previous settlements, which remove some of the restrictions on Ocwen’s business but establish new ones as well.
As with the previous settlements, Ocwen’s new settlements with New Mexico, Virginia, and West Virginia prohibit the nonbank from acquiring any new residential mortgage servicing rights until April 30, 2018.
Ocwen also agreed to develop a plan to transition to a new servicing system, which would move Ocwen away its proprietary REALServicing platform, which is used to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information.
Each of the states consent agreements restrict Ocwen from boarding new loans through REALServicing. Ocwen said that this restriction does not apply to loans already serviced on REALServicing, including modifications or loans that are converted to an arrangement where Ocwen acts as a subservicer.
Under the terms of the agreements, Ocwen is allowed to merge with or acquire an unaffiliated company to facilitate the transfer from REALServicing, but Ocwen is required to give the state regulators 30-days notice and the states must not object to the deal.
Ocwen also agreed to engage an auditor to perform an escrow review of approximately 9,000 loans, and agreed to develop corrective actions plans for errors identified in the review and “provide appropriate consumer remediation.”
Ocwen said that in reaching the agreements, the company did not admit or deny liability in these settlements, and noted that none of these agreements contain any monetary fines or penalties.
“Ocwen is pleased to have reached resolutions with three additional states to resolve regulatory actions brought against the company, bringing the total number of states where we have reached a resolution to 15,” Ocwen spokesperson John Lovallo said in a statement. “We continue to work cooperatively with the remaining 16 state regulatory agencies and two state attorneys general to reach acceptable resolutions.”
Ocwen also disclosed that it received two letters from the SEC earlier this week, stating that the agency concluded two investigations.
The first investigation, stretching back to February 2015, covered the use of collection agents by mortgage loan servicers. In March 2016, Bloomberg reported that the SEC was investigating several nonbanks for “prematurely unleashing debt collectors on delinquent borrowers.”
Ocwen’s portion of that investigation now appears to be over, as Ocwen disclosed that the SEC said that it will not be seeking an enforcement action in the matter.
The second SEC investigation, which Ocwen disclosed in February 2016, dealt with the “fees and expenses charged in connection with liquidated loans and REO properties held in non-agency RMBS trusts.”
According to Ocwen, the SEC also closed that investigation without issue.
“In addition, we are pleased that the SEC has concluded both of the investigations we have previously disclosed,” Lovallo said.