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Ocwen agrees to stop slapping borrowers with gag orders
Embattled loan servicer says practice was rare
Ocwen Financial will no longer seek gag orders when settling legal disputes with borrowers.
The about-face is part of an agreement with the New York Department of Financial Services, which has recently scrutinized the embattled mortgage servicer. Ocwen will also stop enforcing existing non-disparagement clauses in agreements it has already struck with borrowers, HousingWire reports.
John Britti, chief investment officer at Ocwen, said the use of gag orders was limited in mortgage modifications in which borrowers took legal action. “Our agreement with the DFS deals with the highly unusual situation where there is a legal settlement agreement with a borrower, representing a fraction of one percent of our portfolio,” Britti said in a statement.
In April, Benjamin Lawsky, the regulatory agency’s superintendent, sought information from Ocwen regarding its relationship with Hubza, a foreclosure auction website. The purpose was to investigate fees charged to Ocwen that appeared to be above and beyond those charged to Hubza’s other customers. Those fees are passed on to investors and borrowers, said Lawsky.
Earlier in the year, Lawsky blocked Ocwen from acquiring $39 billion in mortgage servicing rights from Wells Fargo, citing uncertainty over the firm’s ability to handle more loan volume. [HousingWire] — Tom DiChristopher