Citing mismanagement of escrow accounts and poor financial condition, mortgage regulators from more than 20 states issued Ocwen Financial Corp
(NYSE: OCN) and its subsidiaries cease-and-desist orders
Thursday. A lawsuit from the Consumer Financial Protection Bureau shortly followed.
The Florida-based company was instructed not to acquire new mortgage servicing rights and residential mortgages until it proves
its financial stability through an analysis of liabilities and justifies its collection and calculation procedures surrounding
consumer funds.
The action follows a six-state examination of Ocwen between 2013 and 2015, which revealed irreconcilable consumer escrow
accounts, unlicensed servicing activity and “significantly deteriorating” financial conditions.
According to the North Carolina regulatory filing, the states confronted OFC’s Board on multiple occasions to express that the
violations “were unacceptable and would not be tolerated.”
Ocwen subsequently failed to provide requested financial documents, at which point the firm and regulators entered into a
Memorandum of Understanding requiring a business plan addressing consumer grievances and the contracting of an independent auditor
to review finances.
Following that activity in 2016, regulators still found Ocwen operating outside regulations.
“Ocwen has engaged in, is engaging in, or is about to engage in acts or practices which warrant the belief that the company is
not operating honestly, fairly, soundly, and efficiently in the public interest, and/or in violation of standards governing the
licensing and conduct of a mortgage loan servicer,” the North Carolina filing read. “The public interest will be irreparably harmed
by delay in issuing a cease and desist order to Ocwen.”
Ocwen shares were trading down 55.2 percent to $2.46 at time of publication.
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