state regulatory developments

Moderator:Scott Nowak, Esq., Associate Director of State Government Affairs, MBA

Panelists:Mary M. Pfaff, Senior Director, Conference of State Bank SupervisorsGus Avrakotos, Partner, Mayer Brown LLPDaniel M. Burstein, Senior Managing Director, Guidepost Solutions LLCAlfred M. Pollard, General Counsel, Federal Housing Finance AgencyMichael R. Pfeifer, Esq., Managing Partner, Pfeifer & de la Mora, LLP

State Regulatory DevelopmentsMay 9, 2017

The CSBS Perspective

Mary M. PfaffSenior Director

Conference of State Bank Supervisors

CSBS and NMLS


• State-chartered financial institutions

• State-licensed financial services companies

OCC litigation

Multistate Mortgage Committee (MMC)

State Regulatory Registry LLC

• Nationwide Multistate Licensing System

NMLS 2.0

Mortgage Call Report, Electronic Surety Bonds

SRR Organization Chart


CSBS filed a complaint against the OCC’s proposal to

issue a special charter for fintech companies (4/28/17)

• Lack of Legal Authority

• Harm to Consumers

• State Leadership

MMC MMET

SCC

Payday &

Auto Finance

State Supervisory and Examination Coordination

MMC – oversight body of state regulators for multistate mortgage supervision (10 state members)

• 62 Exams conducted since 2010

Equivalent to 620 individual state exams

Risk-Based Focus and Scheduling

• Mortgage Call Report data

Mortgage Examiners Report (attached to presentation)

Compliance Review Technology

CSBS/AARMR Mortgage Accreditation for Departments

Mortgage Call Report

MCR Revision Plan

• Transition MCR reporting req’s to be business activity based

• Limit the req’d fields to industries in which the licensee engages

• Revise and update MCR definitions and provide clarity on discrepancies

• Provide state agencies with access to data analytic tools and reports

Action Plan

• May-July 2017: Regulators and industry development and review of changes

• August 2017: AARMR conference in-person joint meeting

• September 2017: Open formal 60-day public comment period on proposed changes

• February 2018: Publicly issue final MCR definitions and specifications

• January 2019: Implement MCR changes with first report due 45 days after Q2019

[email protected]

NMLS 2.0

Complete Rebuilding of NMLS

• User based interface

Journey Maps and User Personas

Regulator and Industry Participation

• January Industry Meetings

• NMLS Annual Conference

• Websites and Yammer (coming soon: new.nmls.org)

• AARMR meetings

• Completion: September 2018

• Includes Examination Management Tool Suite

Improvements for NMLS 2.0

Gus AvrakotosPartner

MAYER BROWN LLP

1999 K Street NW, Washington, DC 20006

[email protected] | 202-263-3219

Generally

Over the course of the year, stagger the license renewal dates for

different license types

Change the license renewal period to once every two years, with half

the licensees renewing in even years and the other half renewing in

odd years

MU1 Disclosures

Eliminate the affiliates disclosure page of the MU1, or limit the extent of the affiliates

that need to be reported

Create a way for exempt company filings to be made in the NMLS without requiring

the exempt company’s control persons to submit an MU2

Do not require all regulatory consent orders to be reported in the NMLS

Do not allow individual state regulatory agencies to compel the uploading of

documents related to sanctions, orders, litigation

Eliminate the requirement to report pending regulatory actions or civil litigation

Restrict the dissemination of uploaded financial statements to those state agencies

whose licensing law requires the submission of financial statements

MU1 Disclosures (continued)

Create an NMLS functionality to allow for state-specific or-required information to be uploaded and be reviewed only by the state agency that required the information

Provide clearer guidance as to the purpose and completion of the Business Activities page of the MU1

Do not add any new questions to the MU1 disclosure questions

Should there be a compelling reason to add a new MU1 disclosure question, do not make the question apply to licensees retroactively

Remove the requirement to note the effective date of a QI for a NEW license application

Retain the 30-day period to update the MU1 disclosure questions

Show approved d/b/as in the MU1 and in Consumer Access when approved by a state

Document amendments to license items

Fully utilize the checklists to identify/request application requirements

Control Persons

Eliminate the need to require licensees to submit an ACN, whether a 30-day, 60-day, or 90-day ACN, with a completed MU2, for the newly appointed executive officers, directors, managers, general partners of a licensee

Remove any language that requires or suggests that branch managers or location supervisors are control persons, who must be listed on the Direct Owners and Executive Officers “page” of the MU1, and must submit an MU2

Provide guidance as to how an applicant or licensee can rebut the presumption of control that applies to certain “control persons”

MU2 and MU4 Disclosures

Do not add questions to the MU2 that require individuals to report on anything that is not required to date

Limit to 10 years the “look-back period” for Control Persons to provide answers to Disclosure Questions

Allow for other regulatory filings, such as disclosure filings with FINRA or with state insurance or real estate broker

regulators, to be used in lieu of MU2s

Eliminate the need to for anyone filing an MU2 or MU4 to report felony or misdemeanor convictions arising from

marijuana use

Limit the “Other Business Question” in the MU2 to financial services businesses in which the person is a self-

proprietor, or the person holds a Control Person position

Amend the “Termination Disclosure” question of the MU2 so that allegations or accusations of identified “bad

acts” do not need to be reported

When a branch relocates, allow for MLO employment addresses to update without a new MU4

Allow for licensed MLOs to transition from one licensed employer to another without needing each state in which the

person is licensed to approve the sponsorship

Attestations

Allow for certain changes to be made in each of the MU Records,

without an attestation

Reduce the number of multiple attestations

Retain the “knowledge standard” for any attestation (do not change

the attestation language)

Allow for the account administrator of multiple licensed entities in the

same family of companies to make the attestation for each licensed

company in the family

NMLS Policy Guidebook

Seek consensus from state regulatory agencies that following the

requirements and direction of the NMLS Policy Guidebook is an

acceptable defense to a regulatory action

Add a section to the NMLS Policy Guidebook that covers NMLS

issues specifically for other business types that obtain licenses

through the NMLS

Revise the NMLS Policy Guidebook to define the terms clearly,

unambiguously, and precisely

Revise the NMLS Policy Guidebook to consistently define

inconsistently defined terms

Costas “Gus” AvrakotosPartner

MAYER BROWN LLP

Costas "Gus" Avrakotos is a partner in Mayer Brown’s Washington DC office and a member of the

Consumer Financial Services group. He concentrates his practice on federal and state regulatory

compliance issues related to housing and mortgage finance, including the following: compliance

with the requirements of state laws governing the licensing and practices of mortgage brokers,

lenders, purchasers and servicers; sales finance companies, money service businesses and

collection agencies; the Real Estate Settlement Procedures Act; the Federal Housing

Administration and the US Department of Veterans Affairs for lenders making or servicing insured

or guaranteed loans; and the secondary mortgage market agencies.

Gus served as a legislative assistant on Capitol Hill for six years, including two years for Senator H.

John Heinz III of Pennsylvania. He has contributed articles to various Mortgage Bankers

Association publications and is a frequent speaker on state mortgage finance licensing and

regulatory compliance issues. He served as a member of the Advisory Council of the American

Association of Residential Mortgage Regulators (AARMR), and works with the Industry

Development and Working Group of the Conference of State Bank Supervisors that has developed

and maintains the Nationwide Multistate Licensing System, and is working to create NMLS 2.0.

[email protected]

202-263-3219

State Mortgage Regulation in the Age of Trump

Daniel M. Burstein

Senior Managing Director

Guidepost Solutions LLC

Reading the Tea Leaves

Wait-and-see approach:

“You can’t just throw something out — you have to look at it, and I’m hopeful that the process that has been started to actually think about these things in a substantive way will result in rational decisions. And I’ll respond if I need to.”

-- NYDFS Superintendent Maria Vullo, on Trump Administration plans to review financial regulations (BNA 5/2/17)

Preemptive approach:

PHH v. CFPB: attorneys General from 16 states + DC move to intervene, citing Trump

State Enforcement of Federal Laws

Enforcement options under federal law for State Regulators and

AGs:

• Consumer Financial Protection Act / UDAAP

• Truth in Lending Act

• Real Estate Settlement Procedures Act

• Fair Credit Reporting Act

Potential Amendment of State Laws and Regulations

Mortgage servicing as an illustration:

• Option 1: Follow federal law, whatever it may be

• Option 2: Follow Obama-era CFPB regulations

• Option 3: Some states exceed Obama-era CFPB baseline

• Option 4: 50+ different sets of rules

Federal Preemption of State Laws and Regs Dodd-Frank Section 1044:

• A “state consumer financial law” is preempted only if:

Application of the law would have a discriminatory effect on national banks, in

comparison with the effect of the law on a bank chartered by that State;

The law prevents or significantly interferes with the exercise by the national bank of its powers; or

The law is preempted by another provision of federal law

• What is a “state consumer financial law”?

A law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account related thereto, with respect to a consumer

How does this impact a state-chartered financial institution?

• Check for state parity or “wildcard” laws

State Law Issues

Alfred M. Pollard

General Counsel

Federal Housing Finance Agency

State Law Issues

Markets and Homeowner Interests

Federal and State Laws

Current Examples of State Law Issues Affecting Mortgage Markets

• New Matters — eNotarization; National versus State Note Repository

(Maine MERS)

• Existing Issues — Addressing Blight (abandoned / vacant properties);

Foreclosure Timelines; Lien Position (HOAs, PACE); Flood Insurance;

Servicer Activities; Others

California Regulatory Developments

Michael R. Pfeifer, Esq.

Managing Partner

Pfeifer & de la Mora, LLP

Introduction

Dora Hawkins: [after stabbing Linus Rawlings (Jimmy Stewart)] Well, he

see‘d the varmint, Pa.

Col. Jeb Hawkins (Walter Brennan): Well done, daughter.

Dora Hawkins: I ain't so sure. It was hard muscle and I could feel the blade

just kinda skitter along his ribs.

Col. Jeb Hawkins: Oh, you just need more practice, that's all. It's a pity you

ain't got the knack your ma had, Lord rest her soul.

---Scene from “How the West Was Won” 1962

Per Diem Interest

Per Diem Interest Statute Under California Civil Code section 2948.5 (“per diem interest statute”), with limited exceptions, a

borrower cannot be required to pay interest for more than one (calendar) day prior to the disbursement of loan proceeds from an escrow on a principal obligation under a promissory note secured by a mortgage or deed of trust on real property with up to four residential dwelling units.

California Financial Code Section 50204(o) prohibits licensees from violating the per diem interest statute, and provides that compliance with that statute may be evidenced by certification executed by the licensee, at no cost to the borrower, pursuant to Code of Civil Procedure section 2015.5, or by other evidence in the loan file that is acceptable to the Commissioner of the Department of Business Oversight (“DBO”)

California Financial Code Section 50501: (a) Any person who violates a provision of this division, or any rule or order under this division, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation. This penalty shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction.(b)…the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce the provisions of this division. (Emphasis added.)

Per Diem Interest Statute (continued) California Financial Code Section 50504(b): If interest on the principal amount of a loan in excess of

the amount authorized by this division is willfully charged, contracted for, or received, in addition to

any other penalties or remedies, the commissioner may order the licensee to refund the excess

interest amount to all borrowers charged the excess amount, with interest at the rate of 10 percent per

annum, calculated from the date the improper charge was imposed. (Emphasis added.)

California Financial Code Section 50513 (Commissioner’s Powers)(invoked if repeat violations):

• (b) The commissioner may impose a civil penalty on a mortgage loan originator or any residential

mortgage lender or servicer licensee employing a mortgage loan originator, if the commissioner

finds, on the record after notice and opportunity for hearing, that the mortgage loan originator or

any residential mortgage lender or servicer licensee employing a mortgage loan originator has

violated or failed to comply with any requirement of this division or any regulation prescribed by

the commissioner under this division or order issued under authority of this division.

• (c) The maximum amount of penalty for each act or omission described in subdivision (b) shall be

twenty-five thousand dollars ($25,000).

• (d) Each violation or failure to comply with any directive or order of the commissioner is a

separate and distinct violation or failure. (Emphasis added.)

Per Diem Interest Statute (continued)

Summary of CC § 2948.5 “Exceptions”

Per Diem interest allowed for more than one calendar day if:

• Borrower affirmatively requests and lender agrees that the disbursement will occur on Monday or a

day immediately following a bank holiday; and

• Borrower is provided with a written disclosure that states:

The amount of additional per diem interest to be charged to facilitate disbursement on Monday

or the day following a holiday; and

That it may be possible to avoid the additional per diem interest charge by disbursing loan

proceeds on a day immediately following a business day; and

• The Disclosure is:

Actually provided to the borrower; and

Acknowledged by the borrower by signing a copy of the disclosure document prior to placing

funds in escrow


DISBURSEMENT DATE DEFINED:

Release No. 58-FS (August 1, 2007) and Release No. 58-FS (Revised), issued May 3, 2017:

“‘Disbursement date’ refers to the date on which the majority of loan proceeds are disbursed to the borrower,

to a third party on behalf of the borrower, or to the licensee to satisfy an existing obligation of the borrower.”

EVIDENCE OF DISBURSEMENT DATE:

Release No. 58-FS (Revised 5-3-17) Evidence of Disbursement Date “Acceptable” to DBO

“Certification” under penalty of perjury per CCP 2015.5

“Written or electronic records reflecting communications between the licensee and the settlement agent

verifying the disbursement date of loan proceeds and identifying the name of the settlement agent

providing the information and the electronic or business address used to contact the settlement agent; or

“Contemporaneous written or electronic records memorializing oral communications between the licensee

and the settlement agent verifying the disbursement date of loan proceeds and identifying the name and

telephone number of the settlement agent providing the information.”


Release No. 58-FS (Revised 5-3-17) Evidence of Disbursement Date “Acceptable” to DBO (Cont.)

ALTA SETTLEMENT STATEMENT

“The Commissioner will accept the disbursement date on an ALTA Settlement Statement as evidence of the disbursement date if 1) a settlement agent prepares the statement; 2) the statement identifies the date that it was prepared; 3) the preparation date is not before the disbursement date, and 4) the statement identifies the settlement agent who prepared it.”

TILA RESPA CLOSING DISCLOSURE (CD)

“Since the disbursement date on the Closing Disclosure is an estimated date and may not be accurate, corroborating evidence is necessary to establish the actual disbursement date, regardless of whether a lender or a settlement agent prepares the disclosure. The Commissioner will accept a copy of a settlement agent’s disbursement ledger or wire transfer confirmation as corroborating evidence of the disbursement date, where the evidence identifies the disbursement date for a majority of the loan proceeds. (Emphasis added.)


Release No. 58-FS (Revised 5-3-17) Evidence of Disbursement Date “Acceptable” to DBO (Cont.)

NON-ALTA SETTLEMENT STATEMENT

“The Commissioner will accept a settlement or closing statement prepared by a settlement agent as evidence of compliance with the per diem statute if the form 1) identifies the settlement agent as the preparer; 2) identifies the date the statement was prepared; and 3) identifies the actual date of disbursement. For all settlement statements, if the date of disbursement is after the date of preparation of the statement, additional evidence is necessary to establish that the disbursement date on the statement constitutes the actual date disbursement occurred.

“If the settlement agent verifies the accuracy of the statement’s disbursement date on or after the actual disbursement date, the Commissioner will accept the verified statement as evidence of the disbursement date.”


Release No. 58-FS (Revised 5-3-17):

“When the Commissioner believes that compliance is uncertain or unclear from a review of the

above information provided by the licensee, the Commissioner may request the licensee

provide additional information to demonstrate compliance with the per diem statute.” (Emphasis

added.) [Fin. Code, § 50204, subd. (o).] (E.g., disbursement ledgers, wire transfer confirmation,

settlement agent certification)

NOTE: This clause leaves unchanged the power the DBO to disregard some or all of the

“evidence” that 58-FS says it will “accept” and, instead, demand whatever additional “evidence”

it deems fit to satisfy itself that “compliance” has actually occurred. In that regard, it is important

to distinguish between what is necessary to “prove” to the DBO that compliance has occurred,

versus simply the types of “evidence” that DBO says it will “accept.” Just because you submit

“acceptable” evidence, does not necessarily mean that you have “proven” your compliance.

Under 58-FS Revised, “acceptable evidence” is not “conclusive proof.”

Trust Accounting

Trust Accounting10 CCR § 1950.314.1

§ 1950.314.1. Trust Account Books

(a) A residential mortgage lender, residential mortgage lender and servicer, or residential mortgage loan servicer shall establish, and maintain current, the following books with reference to its trust accounts:

(1) A trust account ledger card for each account detailing receipts and disbursement of all funds deposited by the borrower, lender or seller with the licensee in connection with the origination, closing or servicing of any mortgage loan. The funds shall be held in accordance with the terms of a written agreement between the licensee and such borrower, lender or seller which provides that upon the occurrence of a specific condition or event, the funds or a portion thereof shall be disbursed to the borrower, lender or seller…

* * *

(b) The records referred to in subsections (a)(1) and (2) shall be reconciled at least once each month with the bank statements of the trust account. The records referred to in subsection (a)(1) shall be reconciled at least once each week with the liability controlling account referred to in subsection (a)(2).

Trust Accounting (continued)10 CCR § 1950.314.6

§ 1950.314.6. Debit Balances Prohibited.

A residential mortgage lender, residential mortgage lender and servicer, or residential mortgage loan

servicer shall not withdraw, pay out, or transfer moneys from any loan or servicing account in excess

of the amount to the credit of the account at the time of the withdrawal, payment, or transfer.

However, a residential mortgage lender, residential mortgage lender and servicer, or residential

mortgage loan servicer may advance its own funds to a loan or servicing account under an impound

arrangement to pay taxes, insurance, and other payments, if the required withdrawal, payment, or

transfer exceeds the amount of the credit for the account. (Emphasis added.)

10 CCR § 1950.314.7

§ 1950.314.7. Payment Processing.

“A licensee shall credit any payment made to a borrower’s account on the same business day the

payment is received by the licensee, regardless of the date of processing. As a general rule, a

licensee shall process any payment to a borrower’s account within two business days from the

business day the payment is received by the licensee. (Emphasis added.)

Emerging Tort Liability

Emerging Tort Liability

Phillip Linza v. PHH Mortgage Corporation (Currently Pending---C.A. Court of Appeal, 3d District)

Issues Presented:

• Whether borrower is limited to breach of contract remedies for misapplication of payments by

loan servicer under loan modification agreement or is also entitled to tort damages for fraud,

intentional interference with contract, intentional infliction of emotional distress, and/or

negligence

• Whether servicer as agent of the deed of trust beneficiary can be liable for interference with a

loan modification contract it services

Amicus Briefs Filed by:

• California Mortgage Bankers Association

• American Legal and Financial Network

• California Mortgage Association

• United Trustees Association

Emerging Tort Liability (continued)Phillip Linza v. PHH Mortgage Corporation (Pending---C.A. Court of Appeal, 3d District) (Factual Background)

PHH and Linza entered into loan modification agreement on November 9, 2010

PHH erroneously delayed transferring Linza’s unpaid escrow balance into principal, but instead treated it as an ongoing escrow shortage and added it to monthly payment amount and then sent Linza an “intent to foreclose” letter when monthly payments were insufficient to pay it off

PHH began foreclosure proceedings in April, 2012 and Linza sued in July, 2012 for breach of contract, negligence, fraud, intentional interference with contract and, at trial, added a cause of action for intentional infliction of emotional distress

Jury found PHH liable for breach of contract and on all 4 tort causes of action awarding Linza $158,902.40 in “past” economic damages, $55,000 in “future” economic damages, $300,000 in “non-economic” damages for emotional distress, and punitive damages of $15.7 million dollars

Trial Court granted PHH’s Motion for Judgment Notwithstanding the Verdict on all of the tort claims and vacated the punitive damages award and also the damages awards “future” economic damages and “non-economic” damages for emotional distress

Trial Court denied PHH’s motion for new trial based on argument that concurrent trial of tort and contract claims prejudiced PHH’s defense of the breach of contract claim

Trial Court awarded Linza $178,731 in attorneys fees

Linza appealed; PHH cross-appealed

Emerging Tort Liability --- Split of AuthorityNymark v. Heart Fed. Savings & Loan Assoc., 231 Cal. App.3d 1089 (1991) .

Borrower sued the lender alleging the appraisal was negligent and breached lender’s duty of “due care.”

Holding: Existence of duty of due care is determined by the court based on balancing the six factors in Biakanja v. Irving (1958) 49 Cal.2nd 647, 650, which are:

1. the extent the transaction was intended to affect the plaintiff;

2. the foreseeability of harm to the plaintiff;

3. the degree of certainty that the plaintiff suffered injury;

4. the closeness of connection between defendant’s conduct and the injury;

5. the moral blame attached to defendant’s conduct;

6. the policy of preventing future harm.

Applying these factors, the Court ruled:

“[A]s a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” (231 Cal.App.3d at 1096.)

“Liability to a borrower for negligence arises only when the lender ‘actively participates’ in the financed enterprise ‘beyond the domain of the usual money lender.’” (Id.)

Emerging Tort Liability (continued)

Analysis 23 years later:

Alvarez v. Bac Home Loans Servicing, LP., 228 Cal.App.4TH 941(2014) .

The Nymark rule is only a general rule even when the lender is acting in its conventional role.

Whether there is a duty to the borrower must be decided “case-by-case” based on the

Biakanja factors, particularly (5) moral blame and (6) policy of preventing future harm:

(5) Moral blame – Separation of servicing from origination is such that borrower’s ability to

protect own interest is “nil” results in “moral imperative” that lenders have a duty to exercise

due care in processing loan modifications. (Offsets causation being attributed to borrower.)

(6) Policy of preventing future harm – HBOR (which became effective 01-01-2013---after

plaintiffs requested modification) reflects a “strong preference” that homes not be lost by

foreclosure and “a rising trend to require lenders to deal reasonably with borrowers in

default to effectuate a workable loan modification”


Why Tort Liability Is Important:

Private Right of Action

• Many statutes/regulations do not grant private right of action

See e.g., No private right of action under U.D.A.A.P. provisions of Dodd-Frank

• Tort Liability Provides entirely separate channel of recovery

Broader Measure of Damages & Commensurate Litigation Risk

• Typically “the amount which will compensate for all the detriment proximately

caused [by breach of the duty of care] whether it could have been anticipated or

not.” ---Including emotional distress? (Difficult to prove; almost always alleged)

Application of Alvarez and its progeny is delaying disposition of cases and greatly

expanding potential liability


Phillip Linza v. PHH Mortgage Corporation

Unlike the other reported cases in which courts have found a separate tort duty of due

care in connection with consideration of a borrower for a loan modification, Linza

seeks recognition of independent tort duties in connection with a servicer’s post-loan

modification conduct

The outcome of this appeal may indicate whether the Alvarez line of cases

recognizing a duty of care and the need for a case-by-case Biakanja analysis will be

limited to pre-loan modification situations or be expanded beyond that

Whatever the outcome, it is likely that review by the California Supreme Court will be

sought perhaps leading to a decision resolving the current split of authority

Ocwen – California Style

CA. Dept. of Business Oversight v. Ocwen Loan Servicing, LLC

$225 Million Settlement of Admin. Enforcement Action commenced in 2014 [Case # 413-0544 OAH No. 2014100930 (2-17-17)]

“The terms [of the settlement] will hold Ocwen accountable for widespread violations of laws that harmed borrowers in our state.”

---CA DBO Press Release February 17, 2017

Allegations Against Ocwen:

Violations of Homeowner Bill of Rights

Failed to provide borrowers all required information in loss mitigation denial notices; wrongly informed borrowers, in loss mitigation denial notices, that they were current on their payments; and provided borrowers with inaccurate information on notices of default

Violations of Servicemembers Civil Relief Act

Failure to reduce, in a timely manner, the monthly interest rate to six percent for California active duty service personnel

Violations of Other Federal Laws

• Collecting borrower-paid mortgage insurance premiums after borrowers were obligated to make such payments

• Failing to inform borrowers of the timelines to accept or reject loan modification offers

• Sending inaccurate and untimely notices to borrowers who were more than 45 days delinquent on their payments, or sometimes failing to send such notices at all

• Failing to promptly submit corrected information to credit reporting agencies on California borrowers when Ocwen had previously provided erroneous information

“Letter Dating Problem”• Ocwen mailed time-sensitive letters to borrowers after the date on the letter, often by many days which endangered

some borrowers’ ability to obtain loan modifications

CA. Dept. of Business Oversight v. Ocwen Loan Servicing, LLC

(continued)

Settlement with Ocwen:

Ocwen to Pay $20 Million in cash for borrower restitution

Ocwen to Pay $5 Million in penalties, attorneys fees, and costs of an administrator to oversee

restitution payments (in addition to the $2.5 million already paid under the January 23, 2015 Consent

Order)

Ocwen to “Re-solicit claims from 19,295 borrowers affected by “Letter Dating Problem”

Ocwen to Provide “debt forgiveness” via loan mods for affected borrowers of up to $198 million, plus

restitution (“bringing total value of settlement amount over $225,000”)

Ends prohibition, in January 23, 2015 Consent Decree, of Ocwen’s acquisition of servicing rights

from any source for loans secured by properties in California (upon payment of the $25 million cash)

Third party selected by DBO will administer the debt relief and borrower restitution provisions of the

settlement and monitor Ocwen’s implementation of a previously-approved action plan to correct

deficiencies in its servicing practices, policies and procedures

Conclusion

Before entering a cave to “see the varmint,” call Scott Nowak…

PFEIFER & DE LA MORA, LLP

Pfeifer & de la Mora, LLP is an “AV” rated law firm dedicated to providing litigation and compliance representation to members of the financial services

industry, including mortgage lenders, servicers, investors, brokers, and related service providers

Michael R. Pfeifer, Esq.

Pfeifer & De La Mora, LLP

3111 North Tustin Street, Suite 260

Orange, California 92865

(714) 282-9800 [email protected]

Questions?

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