In the last several months, Ocwen Financial has reached settlements with nearly every one of the 31 states that took regulatory actions against the nonbank last year over alleged escrow and other mortgage servicing issues.
Ocwen continued that settlement streak this week, reaching a settlement with the state of Maryland. The company disclosed the settlement in a Monday filing with the Securities and Exchange Commission.
While many of the previous settlements carried similar terms, including the nonbank being prohibited from acquiring any new residential mortgage servicing rights until April 30, 2018, the Maryland settlement goes even further and carries stiffer penalties than the earlier settlements.
Maryland was not among the initial wave of states that took action against Ocwen last year. Initially, a group of 22 states sanctioned Ocwen for alleged widespread issues with consumer escrow accounts and allegations that the companies were conducting “willful and ongoing unlicensed activity” in some states.
One week after those first 22 states took action, Maryland’s Commissioner of Financial Regulation placed its own restrictions on Ocwen’s business, citing the company’s “failure to cooperate” with examiners from the Multi-State Mortgage Committee, Ocwen’s alleged unlicensed servicing activity in the state, and other issues.
As a result of those issues, Maryland partially “summarily suspended” the mortgage lender licenses of Ocwen’s various businesses, prohibited Ocwen from servicing mortgages in the state, and ordered the company to suspend “any and all” stock repurchases “during the course of this administrative action.”
And considering the extent of Maryland’s regulatory action, it probably shouldn’t come as a surprise that the state’s settlement is harsher than some of the other states.
According to Ocwen’s SEC filing, the settlement with Maryland stipulates that Ocwen must pay a $500,000 penalty to the state and must provide $273,500 in remediation to “certain” borrowers in the form of cash payments or credits to borrower accounts.
Ocwen could also be fined an additional $1.45 million if it fails to comply with “certain requirements” of its settlement with Maryland.
The Maryland settlement also prohibits Ocwen from repurchasing any of its own stock until Dec. 7, 2018, with “certain de minimis exceptions.”
According to the SEC filing, the Maryland settlement also carries many of the same terms as the company’s previous settlements.
Previous settlements prohibited the nonbank from acquiring any new residential mortgage servicing rights until April 30, 2018, and stipulated that Ocwen develop a plan to move away from REALServicing, Ocwen’s proprietary platform that 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 in early November.
The settlement with Maryland brings the total number of settlements to 29 of the 31 jurisdictions that brought regulatory action against the nonbank last year.
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. Those were followed by Texas; Hawaii; Nebraska, Oregon and Wyoming; North Carolina and South Dakota; and most recently, Connecticut.
In its SEC filing, Ocwen said that it continues to seek resolutions with the remaining two regulatory agencies and two state attorneys general that brought actions against the company.
