Ocwen, CFPB mediation talks end with no settlement, the company says

Mediation between Ocwen Financial and the Consumer Financial Protection Bureau has ended without a resolution, with the mortgage company stating the regulator's requests were excessive.

"We remain steadfast in our belief that the CFPB's claims regarding Ocwen's past servicing practices are unsubstantiated and the bureau's settlement demands do not reflect the merits of this case," Ocwen said in a press release.

"While we remain committed to attempting to resolve this matter prior to trial, our pending motion for summary judgment filed on June 5, 2020 supports our position on this matter, and we will continue to vigorously defend ourselves going forward," the statement read.

The CFPB said it does not comment on pending litigation.

The West Palm Beach, Fla.-based company already scored a legal victory over the CFPB, with a federal judge dismissing the case in its entirety in September 2019. But the ruling by Judge Kenneth Marra allowed the CFPB to amend its complaint and refile.

In anticipation of a resolution being reached in mediation, Ocwen increased its legal and regulatory accrual related to the CFPB matter by $13.1 million during the fourth quarter of 2020.

The case filed by the CFPB is the only active legal action remaining from the multiple lawsuits filed in April 2017, which alleged that there were problems with Ocwen's loan escrow practices. In October, the final settlement among the 30 legal actions brought by state attorneys general and/or mortgage regulators was announced. Florida — which filed the initial case with the CFPB — settled to receive $11 million from the company.

As part of the initial settlements, Ocwen was forced to move its servicing portfolio to Black Knight's platform from the Altisource Portfolio Services technology it had been using. Ocwen and Altisource were once corporate siblings under the management of William Erbey.

The transition was one of the reasons behind Ocwen's February 2018 agreement to purchase PHH Mortgage, since PHH's systems allowed the company to migrate over to Black Knight's platform more easily.

Most recently, Ocwen joined with Oaktree Capital Management in a joint venture to purchase between $50 billion and $60 billion of government-sponsored enterprise mortgage servicing rights that PHH will subservice. In addition, the company signed multiple contracts in the fourth quarter that will bring in between $30 billion to $40 billion in new servicing.