Ocwen Financial has agreed to pay $150 million to New York regulators to settle allegations that it fudged foreclosure documents and said Monday that its founder and, executive chairman, William Erbey is stepping down after 30 years with the Atlanta company.
Ocwen has been engaged in a two-year-long legal case over whether it backdated thousands of foreclosure letters to homeowners. The company had already set aside $100 million for a potential settlement during this year's third quarter. Ocwen will pay the aforementioned $100 million to New York State as part of a civil penalty while an additional $50 million of fines will be paid to current and former New York homeowners who Ocwen filed foreclosures against between January 2009 and Dec. 19, 2014. Ocwen will charge the additional $50 million against its fourth-quarter results.
Ocwen will also accept increased oversight of Ocwen's operations, the adoption New York borrower assistance measures, and Department of Financial Services' approval for mortgage-servicing rights acquisitions.
Erbey will step down from his post on Jan. 16, at which point, Barry Wish, an Ocwen director, will take over as nonexecutive chairman.
"I am grateful to the many associates who have worked alongside me and proud of what we have accomplished," Erbey said in a released statement.
Ocwen's shares plunged in news of the settlement with the New York Department of Financial Services. At 11 a.m., the stock was down 22.4% from Monday's close, to $16.99.