Ocwen enters mortgage settlement with 10 states

Embattled mortgage company Ocwen Financial said Friday that it has entered into a settlement agreement with 10 states, including Illinois, Michigan, Georgia, Wisconsin and South Carolina.

Among other things, Ocwen will not take on the servicing of any loans in those states until April 30. It also will hire a third-party auditor to examine its collection practices.

West Palm Beach-based Ocwen (NYSE: OCN) will pay no fines, and it neither admitted nor denied liability. The mortgage servicer continues to negotiate with other states, including Florida.

The five other states involved in the new settlement are Idaho, Maine, Mississippi, Montana and Rhode Island. Indiana and Nevada, meanwhile, are dropping their cases against Ocwen.

In April, Ocwen shares plunged 50 percent after federal and state regulators sued the company.

In a particularly devastating blow, North Carolina led a group of 20 states in barring Ocwen from taking on new business until it proves that it accurately records escrow payments. Meanwhile, echoing years of gripes from borrowers, the federal Consumer Financial Protection Bureau slammed Ocwen’s practices.

While the Consumer Financial Protection Bureau, an O ba ma-era creation, isa favorite target of Republicans pointing to regulatory overreach, Ocwen ran afoul of overseers on both sides of the political aisle: Pam Bondi, Florida’s staunchly Republican attorney general, also sued Ocwen.

Bondi said at the time that Ocwen fleeced Florida borrowers by “filing illegal foreclosures, mishandling loan modifications, misapplying mortgage payments, failing to pay insurance premiums from escrow and collecting excessive fees.”