Ocwen and FIS agree to settle lawsuit over alleged audit abuses
Ocwen Financial and Fidelity Information Services entered into a settlement agreement over allegations involving a regulatory compliance audit the West Palm Beach, Fla.-based servicer was required to pay for.
The legal case and settlement, which also included FIS parent Fidelity National Information Services, was related to expenses submitted to Ocwen as part of the audit. The three companies "have entered into a confidential settlement agreement resolving all claims for all parties in the lawsuit," according to court documents obtained from California's Superior Court in Sacramento.
All involved agreed to pay their own costs, expenses and attorneys' fees. Terms of the settlement were not otherwise disclosed. Filings disposing of the original case, along with documents disposing of a related amended complaint and a cross-complaint, were entered into the court records.
The private lawsuit stemmed from an independent audit of Ocwen that the California Department of Business Oversight hired FIS to conduct in 2015.
The audit ended in early 2017 when Ocwen settled allegations that it engaged in illegal servicing practices with the state.
In the lawsuit, Ocwen had alleged FIS padded the expenses it submitted for reimbursement. The settlement the companies have agreed to resolves those allegations.
Ocwen has been working to reduce expenses related to lawsuits and regulatory matters as part of broader cost-cutting measures. In the first quarter, it realized $32 million in annualized savings on legal and other professional services, according to an investor presentation.
The mortgage serving company plans to cut $70 million more in legal and other professional costs through a re-engineering of its operations. Other categories the company has targeted for expense reduction include staff compensation and benefits, technology and communications, and facilities.