Ocwen Financial Corp. will no longer require distressed borrowers involved in litigation with the mortgage servicer to sign nondisparagement agreements as a condition for receiving a loan modification, New York's banking regulator said Wednesday.

"In discussions with our department, Ocwen has agreed to no longer seek gag rules as part of settlement agreements or loan modifications with borrowers, "said Benjamin Lawsky, superintendent of New York's Department of Financial Services, in an e-mailed statement.

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