Ocwen reaches mortgage servicing settlement with Hawaii

Settlement streak reaches 22 states

Ocwen Financial, fresh off agreeing to move its mortgage servicing operations away from its proprietary REALServicing platform to Black Knight’s LoanSphere MSP servicing system, reached another settlement with a state that brought regulatory action against the company earlier this year for servicing issues.

Over the last few weeks, the nonbank has reached agreements with 21 of the 31 states that took regulatory actions against it earlier this year over alleged escrow issues and restricted the company’s ability to acquire new mortgage servicing rights and originate new loans.

The first round of settlements included Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina, and Wisconsin. Then came New Mexico, Virginia, West Virginia; followed by Alabama and Minnesota; then Arkansas, Tennessee, and the District of Columbia; and most recently, Texas.

And Wednesday, Ocwen disclosed in a filing with the Securities and Exchange Commission that it reached an agreement with the state of Hawaii to remove the state’s mortgage servicing restrictions.

As with the previous settlements, Ocwen’s agreement with Hawaii prohibits the nonbank from acquiring any new residential mortgage servicing rights until April 30, 2018.

As part of the agreement, Ocwen also agreed to develop a plan to move away from REALServicing, which is used to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information.

That plan will be achieved by Ocwen moving its servicing to Black Knight’s platform, a deal that was announced earlier Wednesday.

The agreement with Hawaii, as with the other states’ agreements, restricts Ocwen from boarding new loans through REALServicing. The 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 part of the agreement, Ocwen must develop a new plan to “enhance” the way it handles consumer complaints and must provide reports on its financial condition to the state for three years.

As with the previous agreements, Ocwen neither admitted nor denied liability. The agreement does not include any monetary fines or penalties.

“Ocwen is pleased to have reached resolution with Hawaii to resolve regulatory action brought against the company, bringing the total number of jurisdictions where we have reached a resolution to 22,” Ocwen spokesperson John Lovallo said in a statement. “We continue to work cooperatively with the remaining 9 state regulatory agencies and two state attorneys general to reach acceptable resolutions.”

[Update: This article is updated to reflect the accurate number of jurisdictions that took action against Ocwen.]

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