MReport May 2017

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TH E M R EP O RT | 47 SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T LOCAL EDITION Fitch Gives Ocwen 'Stable' Rating THE LENDER'S RECENT LEGAL SETTLEMENTS FACTORED INTO THE RATINGS. GEORGIA // The outlook for Atlanta-based Ocwen Loan Servicing's residential mortgage products is positive, as Fitch Ratings has just deemed all seven product lines "stable." According to Fitch, Ocwen's prime, Alt-A, subprime, HELOC, closed-end second lien, RSS3, and RMS3 products all received "Outlook Stable" ratings. The re - sults are a result of Ocwen's con- tinued efforts to "work through regulatory settlements," according to Fitch's release on the matter, as well as several other factors. In February, Ocwen reached a settlement with the California Department of Business Oversight. The company is also working through regulatory issues with the New York Department of Financial Services and the National Mortgage Settlement. According to a 10K report filed last month, Ocwen is also preparing for a potential $12.5 million-dollar settle - ment with the Consumer Financial Protection Bureau. In addition to the company's movement on regulatory issues, Fitch also cited improvements in Ocwen's overall servicing opera - tions as a factor in the latest ratings. "Ocwen continues to make incremental improvements and enhancements to its primary and special servicing operations," Fitch's release stated. "Since the prior review, the company transi - tioned to a new lock-box vendor, streamlined its investor report- ing for PLS deals, updated its servicing transfer processes, and consolidated correspondence management." The organization's technologi - cal advances—what Fitch called a "highly integrated technology environment"—also played a role in the ratings. "Ocwen's highly integrated systems result in an enhanced technology environment," the release stated. "The company le - verages a number of systems from Altisource Portfolio Solutions S.A. (Altisource), including its core servicing system REALServicing, and Equator, a default servic - ing platform. Since Fitch's prior review, Ocwen implemented Back in The Black for loss mitigation processing." Fitch's latest residential servicer ratings also factor in Reg Ab and USAP results, which show no incompliance. "The most recent Reg AB and USAP reports for the master servicing operation did not contain any instances of material non-com - pliance," Fitch reported. "Master servicing has reported no instances of material non-compliance with Reg AB or USAP requirements for the past eight years." In June 2016, Fitch gave Ocwen a "B- / stable" long-term default rating. The company currently services a portfolio of 1.36 million loans, total- ing more than $203 billion. BofA Fulfills Settlement Obligations Ahead of Schedule THE BANKER PAID $7 BILLION IN CONSUMER RELIEF FOR 2014 DOJ CASE. NORTH CAROLINA // In August 2014, Charlotte-based Bank of America agreed in a settlement with the U.S. Department of Justice and six states to provide $7 billion in consumer relief. Bank of America recently reported that it has competed this obligation two years ahead of schedule. Independent Monitor Eric D. Green's eighth and final performance review included an additional $37.8 million of credit for consumer relief in Q 3 2016, along with 163.6 million of credit earned by Bank of America for reaching certain incentive milestones built into the settle - ment. This put Bank of America over the finish line with a total of $7,005,373,353 of credit earned. "We can't turn back the clock or pretend that the financial crisis didn't wreak havoc on millions of American homeowners," Green said, "but it appears that the Bank's consumer relief did further the settlement agreement's principle goal of helping struggling home - owners remain in their homes and communities still reeling from the effects of multiple foreclosures and abandoned homes." The implementation of the set - tlement was successful in direct- ing most of the consumer relief to those who needed it the most. The majority of consumer relief came in the form of mortgage loan modifications, 53 percent of which were in areas identified by the U.S. Department of Housing and Urban Development as part of Distressed Census Tracts, or Hardest Hit Areas. The settlement agreement also provided for resources to be directed to local organizations and legal assistance programs to help stabilize neighborhoods and provide foreclosure-prevention as - sistance and other housing-related counseling activities. Areas such as Atlanta and Las Vegas were hit especially hard in the mortgage crisis, and 35 percent of homes in these areas were "underwater." Eric D. Green found that the $128 million worth of loan modifications in Atlanta and $97 million in Las Vegas "provided substantial assistance to communi - ties that were still hurting." "We have been detailed, diligent, and exacting in ensuring that the Bank only received credit strictly for which it was entitled," Green said. "My professionals and I have determined that Bank of America's submissions and calcu - lations for its consumer-relief cred- it are correct and that the Bank has complied with all the terms of the Settlement Agreement." "We can't turn back the clock or pretend that the financial crisis didn't wreak havoc on millions of American homeowners." —Eric D. Green, Independent Monitor SERVICING

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