Ocwen settles with three more states to ease mortgage servicing restrictions

Add Arkansas, Tennessee, and Washington, D.C. to the list

Ocwen Financial’s streak of settling with states that 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 continued Tuesday.

The nonbank disclosed Tuesday in a filing with the Securities and Exchange Commission that it reached agreements with Arkansas, Tennessee, and the District of Columbia, bringing the total number of states it’s settled with to 20.

Recently, Ocwen settled with Alabama and Minnesota. Before that, it was New Mexico, Virginia, and West Virginia. The first round of settlements included 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, but the settlement with Tennessee goes a step further.

Tennessee’s original consent order laid out a series of concerns about Ocwen’s financial condition, including whether Ocwen had enough money on hand to continue to function as a going concern.

The new agreement with Tennessee requires Ocwen to provide ongoing financial reporting to the Tennessee Department of Financial Institutions, which would allow the department to monitor the Ocwen’s financial position.

As with the previous settlements, Ocwen’s new settlements with Arkansas and the District of Columbia prohibit the nonbank from acquiring any new residential mortgage servicing rights until April 30, 2018.

Ocwen also agreed to develop a plan to move away from 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.

As with the previous agreements, Ocwen neither admitted nor denied liability. Additionally, none of the agreements call for any monetary fines or penalties.

“Ocwen is pleased with the progress we are making to reach resolutions on the state regulatory actions brought against the company,” Ocwen spokeperson John Lovallo said in a statement. “These latest settlements bring the total number of states where we have reached a resolution to 20. We continue to work cooperatively with the remaining 11 state regulatory agencies and two state attorneys general to reach acceptable resolutions.”

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