December 22, 2014


     William C. Erby, the Executive Chairman of Ocwen Financial Corporation, will resign as part of a settlement with the New York Department of Financial Regulation that was announced on December 22, 2015.  This Ocwen settlement, the latest in a series of settlements, also requires Ocwen to pay $150 million toward New York housing programs and to appoint two new outside directors.  An outside monitor will also be appointed. The settlement requires Ocwen to admit that it mishandled foreclosures and modifications. Ocwen will not be allowed to make acquisitions and expand further until it has addressed New York regulators’ concerns about its mismanagement and abuses.

A late-December settlement is becoming a perverse Christmas tradition for Ocwen. In December, 2013, Ocwen reached a $2.1 billion settlement with 49 state attorneys general, the District of Columbia, state mortgage regulators and the Consumer Financial Protection Bureau.  Ocwen was supposed to provide $2 billion in first lien principal reduction nationwide.  $125 million was distributed nationwide to selected borrowers in early December, 2014.  About 200,000 borrowers who lost their homes to foreclosures from 2009 to 2012 were eligible for payments.  Ocwen also agreed to submit regular reports to Joseph A. Smith, North Carolina Commissioner of Banks, who was the designated Settlement Monitor, establish appropriate standards for executing documents in foreclosure cases, end improper fees, end dual-tracking, implement adequate staffing levels and training and establish better communication with borrowers.

The settlements with banks and mortgage companies rely heavily on the honor system.  Companies establish an Internal Review Group (“IRG”) that submits reports to the Settlement Monitor.  In early December, 2014, Settlement Monitor Smith announced that he could not rely on the work of Ocwen’s IRG for the first half of 2014 and appointed an outside accounting firm to determine whether Ocwen had complied with the settlement.

In October, 2014, attorneys general from Illinois, Florida and Iowa announced that they were examining the issue of possible backdating of modification denial letters by Ocwen, an issue first raised by Benjamin Lawsky, the head of New York’s Department of Financial Services.  The backdating prevented borrowers from filing timely appeals of the loan modification denials.



1. Ocwen Loan Servicing, LLC and its employees may no longer act as attorney-in-fact for any of the following entities:

Aegis Wholesale Corporation; Ameriquest Mortgage;  Argent Securities

Bank of America; Bank of New York; BAC Home Loans Servicing;

Citimortgage; Citibank; Countrywide Home Loans;

Deutsche Bank National Trust Company;

The Federal Deposit Insurance Corporation;

GMAC Mortgage; Homeward Residential

New Century Mortgage Corporation

OneWest Bank; U.S. Bank

2. Ocwen Loan Servicing LLC and its employees may no longer prepare, sign and/or file any mortgage assignment assigning a mortgage FROM Ocwen to any other entity without attaching a certified copy of the assignment TO Ocwen and any preceding assignment(s) showing the complete chain-of-title from the loan originator to Ocwen.  These interim assignments may not be made by Ocwen acting as attorney-in-fact to assign a mortgage to itself.

3. Ocwen employees may no longer sign as officers of Mortgage Electronic Registration Systems, Inc.

4. Ocwen Loan Servicing, LLC may not act as a plaintiff in any foreclosure case unless the loan was originated by Ocwen or an Assignment of Mortgage to Ocwen was previously filed in the official records of the county where the foreclosure is to be filed.

5. Ocwen Loan Servicing, LLC and its employees may no longer sign any mortgage assignment assigning a mortgage to a mortgage-backed trust.

6. Ocwen Loan Servicing, LLC must file a Notice in every jurisdiction where it has filed a foreclosure action that its documents have been found by regulators to be unreliable.

7. The individuals responsible for the back-dating of the modification letters, and the preparation of phony loan documents will be indicted and charged with mail fraud, conspiracy and racketeering.