Maryland Investigating Ocwen's Servicing Business
The Maryland Department of Labor, Licensing and Regulation is examining the collection practices of Ocwen Loan Servicing, West Palm Beach, Fla., one of the largest subprime players in the U.S.
A spokeswoman for the MDLLR told Mortgage Servicing News, "We don't randomly conduct exams," and added, "We saw some flags."
One of those flags was the high number of complaints the state has received on Ocwen from Maryland homeowners.
The company, a publicly traded non-depository (and former thrift), was singled out by Maryland Gov. Martin O'Malley last week at a press conference on foreclosures.
Mr. O'Malley described the exam of Ocwen as wide-ranging. Last month, state officials were not elaborating much about the situation.
Ocwen is considered a "standalone" servicer, which means it processes monthly payments on loans without owning the underlying paper or servicing strip. Eighteen months ago, Maryland began requiring that standalone servicers have a separate license for this business and be sanctioned by the state.
Bill Rinehart, vice president and chief credit officer for Ocwen, said, "We received an examination request in the ordinary course of business. That's as much as we know. If they find something in the exam we'll address it."
Ocwen services $53.5 billion in loans. At year-end, its foreclosure rate was 6.47%, compared to 3.21% a year earlier. Mr. Rinehart noted that less than 1% of Ocwen's foreclosure cures result from "short sales" or "deeds in lieu."
Ocwen president Ron Faris wrote a letter to Gov. O'Malley pledging the firm's cooperation but also questioned why Ocwen was singled out in the press conference.
"Ocwen has always been committed to providing excellent customer service and has been recognized for its responsiveness," he wrote in the letter. A few years ago, Ocwen stopped funding subprime loans, concentrating on being a subservicer only. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/