Ocwen's Internal Review Is 'Independent,' Settlement Monitor Says

Ocwen Financial's internal review group is "independent," and the Atlanta servicer is in compliance with the national mortgage settlement, settlement monitor Joseph A. Smith said Tuesday.

Smith, who heads the Office of Mortgage Settlement Oversight, launched an investigation of Ocwen in December after a whistle-blower accused the internal review group of failing to pick random files for review. Servicers' internal review groups are required to be independent from management and to take statistically valid loan samples of loan files and test them to ensure compliance.

"I have determined that Ocwen's [internal review group] is now sufficiently independent, competent and capable of effectively implementing and executing its work under the settlement," Smith said in a press release.

Ocwen continues to fix several issues including the backdating of foreclosure notices to a few hundred New York borrowers that landed the company in hot water with former New York banking regulator Benjamin Lawsky.

Smith said Ocwen is implementing a corrective-action plan to ensure it adequately notifies borrowers of any missing or incomplete documents in loan modification applications in a timely manner. Moreover, Ocwen has taken sufficient steps to promptly terminate force-placed insurance and refund premiums to affected borrowers, Smith said.

The company also has consented to extending the term of the Smith's reviews of certain performance measures through 2017.

Ocwen has been credited with providing roughly $881 million of its $2 billion in consumer relief obligations under the settlement, Smith said.

The mortgage settlement with federal regulators and 49 state attorneys general resulted from servicers' robo-signing foreclosure documents and other lapses.

It took 82 auditors and other professionals to conduct the testing on Ocwen, Smith said.