Ocwen Agrees to End California Dispute for $2.5 MillionZeke Faux
Ocwen Financial Corp., one of the biggest U.S. mortgage servicers, will pay $2.5 million to settle a dispute with the state of California, avoiding a threatened suspension of its license.
The Department of Business Oversight will pick an independent auditor to make sure Ocwen turns over the data that the agency said was withheld, Tom Dresslar, a spokesman for the department, said Friday in an e-mail. Ocwen will be barred from taking new customers in California until the agency determines it’s in compliance with information requests.
Ocwen’s stock dropped the most ever last week after the Los Angeles Times reported that California was seeking to suspend its license. The company has been accused by U.S. and state regulators of mishandling foreclosures. William Erbey, 65, the firm’s founder, agreed last month to step down from his positions at Ocwen and related companies in a settlement with New York.
Mortgage servicers handle billing and collections on behalf of lenders or investors who own the loans, and oversee foreclosures when borrowers default.
Spencer Waybright, a spokeswoman for Ocwen with Sard Verbinnen & Co., said the company was pleased to have resolved the matter with the Department of Business Oversight, or DBO.
“We look forward to continuing to work together with the DBO to assist struggling homeowners throughout California,” Waybright said in an e-mailed statement.
Adding to Ocwen’s legal issues, a group of mortgage-bond investors accused Ocwen of “imprudent and improper servicing practices.” The investors said on Friday that they plan to take action to recover losses caused by Ocwen’s alleged failures.
BlueMountain Capital Management, the $20 billion investment firm, said Friday that it’s betting against Ocwen’s stock and that “misconduct” by Ocwen triggered a default in securities issued by an affiliate of the mortgage servicer.