Ocwen Financial has enjoyed a couple of favorable outcomes in the last week after a tumultuous 2014 and first half of 2015.
On Thursday, Wells Fargo certificate holders voted to keep Ocwen on as a servicer for several trusts. Earlier this week, an independent monitor released a report saying it had concluded that issues surrounding Ocwen's Internal Review Group (IRG) had been "sufficiently addressed" following a year-long investigation.
"We are pleased with the outcome of the vote by Wells Fargo’s certificate holders," Ocwen spokesman Jon Lovallo said. "Ocwen will continue to service pools for the benefit of the entire trust, and will continue with its industry leading modifications to result in sustainable loans benefitting the loan investors as a whole as well as borrowers and communities."
Thursday's outcome of the Wells Fargo vote stood in contrast to what happened in February, when Wells Fargo bondholders ousted Ocwen from two mortgage servicing deals after a downgrade of Ocwen's ratings.
Independent monitor Joseph A. Smith Jr., who is also monitoring Ocwen's compliance with the 2012 National Mortgage Settlement, issued his final report on his investigation of Ocwen's IRG earlier this week. While two failed metrics were found in Ocwen's IRG, Ocwen submitted a corrective action plan for both and the monitor was satisfied with the servicer's progress.
"We are pleased that after more than one year of intense scrutiny and investigation by the monitor, our original testing was substantially validated," Lovallo said. "The monitor appears to have regained confidence in our Internal Review Group and our overall compliance with the National Mortgage Settlement."
Smith's office began investigating Ocwen's IRG in May 2014 after an employee reported "serious deficiencies" in the IRG's processes and issues related to erroneously dated foreclosure notices to about 7,000 borrowers. That issue led to a $150 million settlement with the New York Department of Financial Services and the departure of Ocwen's chairman and founder, Bill Erbey, after 30 years.
Smith also confirmed that Ocwen had provided more than $881 million in consumer relief toward the servicer's obligation of $2 billion under the terms of the NMS. Ocwen has more than two years to pay the remaining $1.19 billion.
In late July, Ocwen reported a net income of $10 million for Q2 2015, down from $34.4 million the previous quarter and $67 million from Q2 2014.