Ocwen Financial Corp. failed two compliance tests related to force-placed insurance during the fourth quarter of 2015, according to a report from Joseph A. Smith Jr., monitor of the National Mortgage Settlement.
The West Palm Beach, Fla.-based servicer failed Metrics 28 and 29 during the fourth quarter, Smith said Thursday. Metric 28 tests the timeliness of communications to borrowers regarding lapses in homeowners insurance coverage and that force-placed insurance can be obtained, while Metric 29 determines whether Ocwen terminated force-placed insurance and refunded premiums in a timely fashion.
"We were disappointed in these failures and we have worked with the monitor to put in place approved corrective action plans on both metrics," Ocwen said in an emailed statement. "We expect future reports to reflect our progress on resolving these concerns."
The failure on Metric 29 occurred for several reasons, but most were caused by issues related to the implementation of a new process for notifying individuals with condominium loans. In particular, some letters did not include required language regarding the need to establish an escrow account for insurance payments. Human errors and technology issues also caused some errors.
With Metric 29, the failure was the result of various manual errors by Ocwen's force-placed insurance vendor.
Smith noted in his report that he approved the corrective action plans for Metrics 28 and 29 in June 2016 and August 2016, respectively. Testing is expected to resume on these metrics in the fourth quarter of 2016.
The monitor also reported that Ocwen had cured its failures on several metrics related to letter dating through previous corrective action plans.
Additionally, Smith lifted a hold in July on foreclosure sales for 17,300 loans that was put in place when the company failed Metric 31, which relates to loan modification denial notices sent to borrowers. He lifted the hold after Ocwen mailed corrected denial notices and provided sufficient time for borrowers to appeal loan modification denials.
