Financial Institutions

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

DIVISION OF FINANCIAL INSTITUTIONS

DAVID Y. IGE
GOVERNOR

CATHERINE P. AWAKUNI COLÓN
DIRECTOR

IRIS K. IKEDA
COMMISSIONER OF FINANCIAL INSTITUTIONS

FOR IMMEDIATE RELEASE
APRIL 20, 2017

Hawaii Issues Enforcement Action to Ocwen Loan Servicing, LLC.

Honolulu, Hawaii – To address mishandling of consumer escrow accounts, ongoing unlicensed activity, and a deficient financial condition, State Mortgage Regulators representing a number of states have issued enforcement actions ranging from revocation of license to cease-and-desist order to Notice of Charges to Ocwen Loan Servicing, LLC., NMLS number 1852 (“Ocwen”) and its subsidiaries.

Ocwen is the fourth largest non-bank mortgage loan servicer in the country and services loans totaling $1,808,233,703 as of Q4 2016 for 5,862 Hawaii residents.

Hawaii joined the State Mortgage Regulators and issued a Notice of Charges and Proposed Order to Ocwen.  The Notice of Charges and Proposed Order prohibits the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its consumer mortgage escrow accounts. The Notice of Charges and Proposed Order also demands Ocwen to cease illegal unlicensed activity that is believed to be occurring in Hawaii.

Consumers are urged to continue making mortgage payments as scheduled and watch their mail for possible changes to the mortgage servicer. A Frequently Asked Questions (FAQ) for consumers is posted on the Hawaii Division of Financial Institutions website at https://cca.hawaii.gov/dfi/ocwen-loan-servicing-llc/.

The Notice of Charges and Proposed Order is the culmination of several years of examinations and monitoring that revealed Ocwen is unable to accurately reconcile consumer’s mortgage escrow accounts. Mortgage escrow accounts are utilized to pay taxes and insurance and hold borrower funds that the company is entrusted to manage appropriately. The company also has operated unlicensed mortgage servicing facilities with apparent willful knowledge it was violating state licensing statutes over a period of several years.

“Ocwen has simply refused to engage honestly with the regulators and has continued to cause borrower harm in spite of repeated warnings to correct deficiencies,” said Iris Ikeda, Commissioner of Financial Institutions, Department of Commerce and Consumer Affairs. “Managing monthly mortgage payments is critical to the business of a servicer, and a company that cannot accurately fulfill that function needs to cease activities harmful to consumers.”

The majority of Ocwen’s loan servicing portfolio represents distressed credit, sometimes referred to as troubled borrowers. As a distressed credit servicer, the company holds an increased responsibility for managing accounts where borrowers may have experienced problems arising from questionable loan sales practices. Such borrowers often need greater care and handling due to the subprime or alternative nature of their loan.

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The Hawaii Division of Financial Institutions (DFI) ensures the safety and soundness of state-chartered and state-licensed financial institutions, and ensures regulatory compliance by state-licensed financial institutions, escrow depositories, money transmitters, mortgage servicers, mortgage loan originators and mortgage loan originator companies, by fairly administering applicable statutes and rules, in order to protect the rights and funds of depositors, borrowers, consumers and other members of the public. Website: https://cca.hawaii.gov/dfi/. Twitter: @Hawaii DFI

Media Contact:

William Nhieu
Communications Officer
Department of Commerce and Consumer Affairs
Email: [email protected]
Office: (808) 586-7582