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Ocwen (OCN) to Pay $30M to Settle HAMP Disclosure Issues

finance.yahoo.com | June 28, 2016

By Zacks Equity Research

Last week, Ocwen Financial Corp. OCN agreed to settle a couple of lawsuits that alleged it of providing misleading data related to the loans it was servicing. The company revealed this agreement in a filing with Securities and Exchange Commission (SEC).

The lawsuits were filed by Michael Fisher and the U.S. Justice Department (DoJ) in 2012. Ocwen will be paying $15 million to both Fischer and the DoJ, though the settlement is yet to receive legal approval. Notably, the company neither accepted nor denied any wrong doing.

Improper Disclosures Related to HAMP

The lawsuits, filed in the U.S. District Court for the Eastern District of Texas alleged Ocwen of failing to make required disclosures under the Home Affordable Modification Program (HAMP). The HAMP was introduced by the U.S. government following the 2008 financial crisis with an aim to help distressed homeowners avoid foreclosure.

The lawsuits claimed that Ocwen violated the False Claims Act by wrongly declaring its compliance with laws and regulations in connection with its participation in the HAMP and FHA insurance programs.

Is Ocwen on Path to Recovery?

Though Ocwen had defended itself against these allegations, it decided to resolve the matter quickly to avoid additional legal expenses.

In a statement, a spokesperson for the company said, “Even though we have solid legal and factual defenses, we decided to settle to avoid prolonged and distracting litigation and the associated legal costs. Ocwen believes the proposed settlement is in the best interests of the company, its borrowers, employees and shareholders. We look forward to returning our full focus to what we do best — helping homeowners stay in their homes.”

Earlier this year, Ocwen had paid a fine of $2 million the SEC to settle charges of misstating financial results by using a faulty methodology to calculate the value of complex mortgage assets.

Further, over the past one year, Ocwen’s stock has been witnessing a downward trend, as evident from the chart below:



Nonetheless, as a result of several regulatory problems, Ocwen has been trying to diversify its revenue sources, shedding mortgage-servicing rights portfolios and trimming workforce. Though these are likely to reduce near term profitability, the company’s efforts will help it improve its creditability.

Currently, Ocwen carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks include Orchid Island Capital, Inc. ORC, Walker & Dunlop, Inc. WD and Stifel Financial Corp. SF, each holding a Zacks Rank #2 (Buy).

Nancy Duffy McCarron, CBN 164780
Attorney, Real Estate Broker, BBB Arbitrator, CA Notary Public
Certified Forensic Loan Auditor, Property Manager


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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