Ocwen Financial Corp. was faulted by the federal monitor of the National Mortgage Settlement (NMS) for falling short on two tests related to force-placed insurance during the fourth quarter of 2015.
In a report issued today by Joseph A. Smith Jr., the NMS monitor, Ocwen was credited with passing all tests during a third quarter review, but the West Palm Beach, Fla.-based company stumbled when tested again.
“As stated in my previous reports, I required Ocwen to place a hold on foreclosure sales on 17,300 loans because of significant errors in loan modification denial notices sent to borrowers,” said Smith in his report. “This hold was related to part of Ocwen’s remediation efforts after it failed Metric 31. These errors included, among other things, failure to provide the factual information considered by Ocwen in making its decision and the timeframe for borrowers to appeal the denial and provide evidence that the denial was made in error. After Ocwen mailed corrected loan modification denial notices to affected borrowers in May 2016 and provided a sufficient timeframe for borrowers to appeal their denials, I permitted Ocwen to lift the foreclosure hold in July 2016.”
Ocwen also failed Metric 23, Smith added, which involves notifying borrowers of missing documents or information within a 30-day period after Ocwen receives a borrower’s short sale request. But Smith also determined that in February 2016 that “Ocwen’s assertion that no material harm had occurred as a result of this failure was accurate, and no remediation was required.”
Smith’s report praised Ocwen for making “demonstrable progress in its efforts to improve its compliance” requirements, although he added a post-script that “there is still work to be done for Ocwen to fully comply.”
“We are pleased that the Monitor’s third compliance report for the third and fourth quarters of 2015 determined that Metrics 7, 19, 23 and each of the metrics impacted by the Global Letter Dating Corrective Action Plan (CAP) have been deemed 'cured,'" said Ocwen in a statement. "The report also confirms that the Metric 31 CAP, which was discussed in the previous Monitor’s report, has been satisfactorily completed and the associated foreclosure holds have been lifted. The Monitor’s report also determined that we passed all tested metrics in the third quarter 2015. In the fourth quarter of 2015, the Monitor found that Ocwen exceeded the error threshold in two metrics that were related to force placed insurance. The errors are primarily related to specific content that was required to be included in the notifications that are sent to borrowers (Metric 28) and timely refunds to borrowers upon providing adequate proof of private insurance (Metric 29). We were disappointed in these failures and we have worked with the Monitor to put in place approved corrective action plans on both metrics. We expect future reports to reflect our progress on resolving these concerns. Ocwen is committed to taking all necessary actions to be complaint with the National Mortgage Settlement (NMS). Ocwen has made significant investments in our risk and compliance management infrastructure to ensure that we are compliant with all rules and regulations related to our business. We will continue to work closely with the Monitor and look forward to the next report.”
