TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/579595
44 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SERVICING THE LATEST Monitor Determines Issues with Ocwen's IRG Have Been 'Sufficiently Addressed' The conclusion comes after more than a year of "intense scrutiny and investigation," the Atlanta servicer notes. J oseph A. Smith, Jr., moni- tor of the National Mort- gage Settlement (NMS), concluded his investigation of Ocwen Financial's Internal Review Group (IRG) with the determination that issues surrounding the Atlanta-based servicer's IRG have been "suffi- ciently addressed," according to an announcement from Smith's office. Smith announced he had filed his final report with the U.S. District Court for the District of Columbia on the investigation of Ocwen's IRG and of Ocwen's compliance with the NMS for the first and second quarters of 2014. Smith's report includes inde - pendent retesting of at-risk metrics and the corrective action plans (CAPs) Ocwen has implemented to address deficiencies. Consumer relief crediting for both Ocwen and SunTrust are included in Smith's report. Smith, who is overseeing Ocwen's compliance with the terms of the NMS, said his team launched an investigation in May 2014 after hearing from an employee about "serious deficien - cies in Ocwen's internal review group process" and issues relating to erroneously dated foreclosure notices to about 7,000 borrowers, which Ocwen blamed on com- puter errors. The erroneously dated notices resulted in Ocwen reaching a $150 million settlement with the New York Department of Financial Services in December 2014. "I now have a measure of as- surance that issues with Ocwen's IRG's independence, competency, and capacity have been sufficient- ly addressed," Smith said. "Before reaching that conclusion, I ordered independent retesting of at-risk metrics, reviewed changes made to the personnel and governance of the IRG, and reviewed and approved corrective action plans to address failed metrics and a global corrective action plan that intends to fix letter-dating issues. I will continue to closely moni- tor Ocwen's compliance with the settlement agreement and plan to report on Ocwen's compliance for the third and fourth quarter of 2014 in the coming weeks." Independent firm McGladrey LLP reviewed metrics deemed to be at-risk for Q1 and Q2 2014 un- der Smith's direction. McGladrey's findings were "substantially consistent" with those of Ocwen's IRG. Two failed metrics were discovered for Q1 2014: one found by McGladrey and one discov- ered by Ocwen's IRG. Ocwen submitted a CAP, which has been approved by Smith, for both failed metrics. Ocwen has also submit- ted a Global CAP to remedy the issue of the erroneously dated foreclosure notices under Smith's direction and approval. According to Smith, Ocwen will implement