The West Palm Beach, Fla.-based company has provided roughly $2.1 billion in consumer relief to 23,000 borrowers, according to a report Thursday from the Office of Mortgage Settlement Oversight's national mortgage settlement monitor, Joseph Smith Jr. Nonetheless, Ocwen has yet to resolve issues related to its failure on one of the compliance metrics.
“While Ocwen has made progress toward correcting a number of past fails, it has not resolved its issues that led to its failure of Metric 31,” Smith said in a news release. “Despite its progress, Ocwen continues to have work to do.”
Metric 31 evaluates whether the servicer has sent denial notifications to borrowers including the reason for denial, factual information used in making the decision and a timeframe in which the borrower can provide evidence that the denial was made in error. Ocwen failed this metric
Ocwen faced delays in resolving the issues related to this metric because it encountered difficulties in fixing the technical problems that led to the original failure. The company ultimately submitted and completed a revised corrective action plan for this metric that Smith had approved.
The company expects testing on the metric to resume in the second quarter of 2016 once Smith concludes that the new plan was implemented. Ocwen noted in its own press release later Thursday that it has already resumed internal testing of the metric.
In the interim, the monitor has barred Ocwen from moving forward with foreclosures on any borrowers who may have been affected by the issue. Only once these borrowers receive the proper information and are given the opportunity to appeal can the foreclosure process advance.
The holds don’t represent “frozen foreclosures,” Ocwen said, but rather an agreement with Smith’s office not to foreclose until remediation has been approved.
“Ocwen takes borrower harm very seriously and worked with OMSO to place certain loans on a hold to ensure that no foreclosure sale would take place until OMSO reviewed and validated that all matters associated with Metric 31 were resolved,” the company said in its release. “Many of these loans have never been referred to foreclosure and never will be.”
Meanwhile, Ocwen has managed to make progress in curing failures on other metrics.
Ocwen had also failed two other metrics (7 and 23) that quarter and one the following quarter (8). The monitor and Ocwen also agreed that the company failed seven metrics (12, 19, 20, 22, 23, 27 and 30) because of issues related to the company’s letter dating. Corrective action plans had been established for metrics 7, 8, 19 and 23 while a Global CAP was created for the letter dating issue. All of these plans were detailed in previous reports from Smith.
Smith reported that Ocwen had completed the CAPs for Metrics 7, 8, 19 and 23 and the Global CAP. He will announce in future reports whether tests for these metrics have found that Ocwen has cured the failures.
Additionally, Smith noted that Ocwen has met the non-creditable requirements outlined in the settlement, including conditions that the servicer’s policies not work against borrowers from any protected class or in any specific geography.
