Ocwen Creates Community Council Following Advocates' Criticisms
Ocwen Financial (OCN) has created a community advisory council to address the needs of distressed borrowers amid regulatory scrutiny of the mortgage servicer.
The new group will "work with Ocwen to consider issues such as principal reduction modifications for families with underwater mortgages," the company said Wednesday. The council will also provide a forum for company leaders to communicate with housing policy advocates.
"We view these groups as valued partners in establishing and maintaining open and effective lines of communication with our customers," said Ronald Faris, president and chief executive of Ocwen, in a press release.
The move follows recent criticism from regulators and housing advocates over the Atlanta-based mortgage servicer's dealings with struggling homeowners.
Faris will lead the council as chairman. The initial group will consist of representatives from 15 nonprofit advocacy groups. Additional members may be added, the company said.
Housing policy groups involved in the council praised Ocwen for creating a forum for communication with consumer groups. John Taylor, chief executive of the National Community Reinvestment Coalition, said in the release that the council will address the needs of "traditionally underserved people and families who are struggling to keep their homes."
Ocwen has come under fire in recent months for requiring underwater homeowners to sign non-disparagement agreements in order to receive a loan modification.
New York banking regulator Benjamin Lawsky blasted Ocwen in May for imposing a "gag rule" on struggling borrowers that barred them from publicly criticizing the company.
Ocwen maintains that the legal agreements were used in "only a fraction" of the loans in its portfolio.
"In those cases, we generally request the settling party to agree to refrain from publicly disparaging the company in the future," the company said in a statement provided to American Banker.
Ocwen agreed in June to stop using the legal agreements, following discussions with Lawsky's office.
Earlier this year, Lawsky blocked Ocwen's purchase of a $2.7 billion mortgage servicing portfolio from Wells Fargo. He also criticized the company in a speech given to the New York Bankers Association, saying that the company's explosive growth "raises red flags."