CUOMO ADMINISTRATION REQUIRES OCWEN TO INSTALL MONITOR

     (The following press release from the New York State Department of 
Financial Services was received by e-mail and was reformatted. The sender 
verified the statement.) 
For Immediate Release: December 5 
CUOMO ADMINISTRATION REQUIRES MAJOR MORTGAGE SERVICER TO INSTALL MONITOR TO 
ENSURE PROMISED REFORMS ARE IMPLEMENTED 
Exam Finds Indications that Problems Remain at Ocwen   
Superintendent Benjamin M. Lawsky today announced that the Department of 
Financial Services is requiring Ocwen Financial Corporation to hire a monitor 
to ensure that the company complies with an agreement to reform its mortgage 
servicing practices. The action was taken after an examination by the 
Department found indications of Ocwen violating the agreement. The monitor will 
be in place for two years. 
Ocwen is one of the largest mortgage servicers and has been growing rapidly, 
servicing more than 764,000 residential mortgages nationally as of August. In 
New York, the company services more than 40,000 residential home loan accounts 
held largely by distressed homeowners. 
“It is not enough to have banks and mortgage servicers sign agreements 
promising to reform their businesses. The best unrealized reforms won’t protect 
homeowners. To protect homeowners facing the risk of losing their homes, we 
must ensure that the companies are actually living up to their promises,” 
Superintendent Lawsky said. “Following complaints about Ocwen’s servicing 
practices, we conducted a targeted exam of Ocwen’s performance and discovered 
gaps in the company’s compliance. The Department is requiring the company to 
hire a monitor so that we can be sure that the reforms are implemented and 
homeowners have a real chance to avoid foreclosure.” 
In September 2011, Ocwen was the first mortgage servicer to agree to the 
Department’s landmark new Mortgage Servicing Practices designed to correct 
robo-signing and other troubling foreclosure and servicing practices that were 
depriving homeowners of the opportunity to avoid foreclosure. 
The Department’s examination of Ocwen’s mortgage servicing practices found 
that, in some instances, the company failed to demonstrate that it had sent out 
required 90-day notices before commencing foreclosure proceedings or even that 
it had standing to do bring the foreclosure actions. The exam also revealed 
gaps in Ocwen's Servicing Practices, including indications that in some 
instances it failed to provide the single point of contact for borrowers; 
pursued foreclosure against borrowers seeking a loan modification; failed to 
conduct an independent review of denials of loan modifications; and failed to 
ensure that borrower and loan information was accurate and up-to-date. 
Under the new Consent Order, Ocwen has 20 days to find an independent monitor 
acceptable to the Department. The monitor will review Ocwen’s operations and 
identify and report on corrective actions within 90 days. 
Ocwen, one of the biggest mortgage servicers, is expanding. In the past two 
years, Ocwen has acquired several major servicers’ portfolios of distressed 
home loans, including Litton Loan Servicing LP in 2011, Saxon Mortgage 
Services, Inc. and EMC Mortgage Corporation in 2012 and has announced plans to 
further expand its servicing operations through the acquisition of additional 
mortgage servicing rights, including from Homeward Residential, Inc., formerly 
known as American Home Mortgage Servicing, Inc. (“AHMSI”). Ocwen just won an 
auction to acquire Residential Capital, LLC (“ResCAP”). 
The Department’s Mortgage Servicing Practices are designed to redress 
troublesome and unlawful practices that have plagued the mortgage servicing 
industry as a whole. Those practices include: 
·    “Robo-signing,” where servicer staff signed affidavits stating they 
reviewed loan documents when they had not actually done so. 
·    Weak internal controls and oversight that compromise the accuracy of 
foreclosure documents. 
·    Referring borrowers to foreclosure at the same time as those borrowers are 
attempting to obtain modifications of their mortgages or other loss mitigation. 
·    Improper denials of loan modifications. 
·    Failing to provide borrowers with access to a single customer service 
representative, resulting in delays or failure of the loss mitigation process. 
·    Imposition of improper fees by servicers. 
The Practices, which have been agreed to by eight mortgage servicers, require 
the following changes: 
1.   End robo-signing and impose staffing and training requirements that will 
prevent robo-signing. 
2.   Require servicers to withdraw any pending foreclosure actions in which 
filed affidavits were robo-signed or otherwise not accurate. 
3.   End “dual tracking”, i.e., referring a borrower to foreclosure while the 
borrower is pursuing loan modification or loss mitigation, and prohibit 
foreclosures from advancing while denial of a borrower’s loan modification is 
under an independent review, which is also required by the agreements. 
4.   Provide a dedicated single point of contact representative for all 
borrowers seeking loss mitigation or in foreclosure so borrowers are able to 
speak to the same person who knows their file every time they call. 
5.   Require servicers to ensure that any force-placed insurance be reasonably 
priced in relation to claims incurred, and prohibit force-placing insurance 
with an affiliated insurer. 
6.   Impose more rigorous pleading requirements in foreclosure actions to 
ensure that only parties and entities possessing the legal right to foreclose 
can sue borrowers. 
7.   For borrowers found to have been wrongfully foreclosed, require servicers 
to ensure that their equity in the property is returned, or, if the property 
was sold, compensate the borrower. 
8.   Impose new standards on servicers for application of borrowers’ mortgage 
payments to prevent layering of late fees and other servicer fees and use of 
suspense accounts in ways that compounded borrower delinquencies and defaults. 
9.   Require servicers to strengthen oversight of foreclosure counsel and other 
third party vendors, and impose new obligations on servicers to conduct regular 
reviews of foreclosure documents prepared by counsel and to terminate 
foreclosure attorneys whose document practices are problematic or who are 
sanctioned by a court.  
Contact: David Neustadt, 212-709-1690 
(kgt)NY 
 
 
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