OCWEN Fight With California Could Be More Damaging Than NYDFS Fight
As OCWEN executives and shareholders begin to breathe a sigh of relief now that they have settled with the state of New York and showed CEO William Erbey the door, the lender could be facing more serious trouble on the horizon.
The state of California has threatened to suspend OCWEN’s California mortgage license if they continue resisting turning over documents showing the servicer’s compliance with the state’s laws protecting homeowners. Tom Dresslar, a spokesman for the state agency, told the LA Times, “that losing a California license would mean that Ocwen, based in Atlanta, would have to sell its rights to handle bill collection and foreclosures in the state.”
Late last year, the Florida-based servicer settled with the state of New York and as part of the deal, Ocwen agreed to pay $150 million toward New York housing programs and aid to foreclosed homeowners and appoint two outside directors subject to state consultation. The servicer also agreed to allow New York State to appoint a new outside monitor to scrutinize nearly every aspect of the company’s operations to insure they are changed to better protect borrowers.
Under an agreement, the servicer will acknowledge that they did not properly deal with distressed homeowners and may have saddled them with excessive charges from affiliated companies and failed to maintain adequate systems for servicing hundreds of billions of dollars in mortgages.
The deal also required that Ocwen’s Board of Directors show CEO William Erbey. Errbey, who built the company into the powerhouse servicer it is today, the door.