"Mortgage servicer Ocwen to pay $2.2b settlement" by Nathaniel Popper | New York Times, December 20, 2013
A $2.2 billion agreement is settling accusations against a large but little-known player in the mortgage industry that escaped last year’s sweeping mortgage settlement.
Ocwen Financial Corp., which has ridden its specialty in servicing subprime loans to become the fourth-largest mortgage servicer in the country, was accused of improperly handling the loans of homeowners after the financial crisis. The agreement with the Consumer Financial Protection Bureau and 49 states covers similar ground to a $25 billion settlement made last year with the largest banks.
Ocwen was not included in the larger settlement because its nonbank status allowed it to slip through the cracks of the different regulatory agencies. The company, which is publicly traded, now falls under the oversight of the bureau, which began in 2011.
Ocwen has prided itself as a specialist at the tricky work of servicing mortgages, something the banks have struggled to do well. But the agreement announced Thursday, which still requires court approval, made it clear that Ocwen has had many of the same problems as those banks....
Ocwen did not have to admit wrongdoing as part of the settlement. The company said in a statement that the agreement was “in alignment with the same ultimate goals that we share with the regulators — to prevent foreclosures and help struggling families keep their homes.”
Ocwen, which was founded in 1988, does not issue mortgages itself. Instead, it buys the rights to service the loans issued by banks, taking a cut of all the payments it receives from homeowners. It also has to do the unpleasant work of dealing with homeowners who fall behind on their payments and eventually face foreclosure.
The company has expanded rapidly since the financial crisis, and its business model has proved to be lucrative....
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