Monitor Expresses Doubts About Servicer’s Internal Review Group for Settlement

Ocwen Financial Corporation has come under fire again, attracting scrutiny this time from the overseer of 2012’s National Mortgage Settlement.
In an update on his continued oversight of the landmark agreement, Joseph Smith Jr. revealed doubts about the internal review group Ocwen is using to monitor the company’s compliance with settlement terms. Ocwen falls under Smith’s supervision due to its acquisition of mortgage servicing rights from a unit of Ally Financial, one of the original banks included in the settlement.
Smith said his team launched an investigation in May after hearing from an employee about “serious deficiencies in Ocwen’s internal review group process.” The investigation included interviews with nine company executives and employees and a review of thousands of documents, he said.
“As a result, I retained an independent auditing firm to review and retest the Ocwen internal review group’s work,” Smith said in his announcement. “This work is ongoing, and I will report on Ocwen’s performance for the period covered in these reports when it is complete.”
The monitor also said that he has taken steps to strengthen the review process of all servicers’ review groups, including adding employee interviews, additional reviews at various steps in the testing process, and the establishment of an ethics hotline so that whistleblowers can easily and anonymously report concerns.
Smith said he has also engaged with the Atlanta-based firm about concerns over its backdating of customer notices. The same independent firm has been tasked with determining the scope of that issue and evaluating the reliability of Ocwen’s systems.
“Many [National Mortgage Settlement] standards and metrics have timeline requirements, so it was important to me to investigate Ocwen’s work in this area,” he said.
According to the report, Ocwen has cooperated throughout both investigations and has agreed to five remedial actions to date.
In a statement, Ocwen CEO Ronald Faris said the company will continue to work to ensure it is fully compliant with all aspects of the settlement.
“We are committed to delivering best-in-class servicing as we work to help struggling borrowers keep their homes,” he added.
Smith’s report also included an update on Ocwen’s consumer relief progress under the settlement terms. Through September 30, the company self-reported that it has completed $1.5 billion in first-lien principal reductions to borrowers. The monitor has yet to credit those numbers toward the company’s obligations.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s