By the end of this year, Ocwen
Financial, one of the largest mortgage servicers in the U.S., may lose its
mortgage license in California.
Ocwen has been subjected
to numerous investigations over the years regarding improper foreclosures,
misplaced and mislabeled borrower documentation, billing issues, and overall failure
to comply with federal and state laws and regulations. In December, Ocwen settled an ongoing investigation by the NYS Department of Financial Services (DFS) by
agreeing to pay $100 million, which was to be used to support foreclosure
defense programs and other relief and $50 million to Ocwen borrowers who reside in New York. As a
result, not only did the company’s chairman step down from his position, but
DFS will continue to monitor Ocwen in the
upcoming years for further unlawful conduct. Although this settlement greatly
impacted borrowers in New York, it was held as a victory for borrowers all over
the country because it was supposed to put Ocwen
in check and to stop it from continuing its cycle of financial abuse.
Unfortunately, the story does not end there. California now
wants to suspend
Ocwen’s mortgage license in the state as a result of Ocwen’s failure to
provide mandatory documentation to the Department
of Business Oversight, which is responsible for determining whether Ocwen is complying with state regulations in
California. Ocwen issued a press
release on January 13, stating that it is committed to resolving the issues
in California, especially since its shares are crashing as a result of the news.
It is crucial that Ocwen turns its business practices around and finally
provide high quality assistance to its borrowers. Otherwise, it will surely
fail.
Settlement conferences will begin in February. If nothing is
resolved, Ocwen will not be able to do business in California for at least a
year. If that happens, Ocwen may not be able to survive such a huge blow.
