After cease and desist, Montana signs new agreement with Florida mortgage service

Montana's Division of Banking and Financial Institutions this week signed a new agreement with a national mortgage service provider, a move that comes five months after the state filed a cease-and-desist order against the company over the way it managed its escrow accounts.

Melanie Hall, commissioner of the state's Division of Banking, said the the settlement with Ocwen Loan Servicing, based in Florida, resolves an enforcement action that resulted from the identification of several deficiencies in the company’s escrow practices.

The issues were identified during a multi-state examination and showed up in a series of consumer complaints filed with the state.

Under the terms of the consent agreement, Ocwen will move its servicing portfolio off of its current platform to one that's better able to manage escrow accounts. It will also establish a new process to resolve complaints.

Hall said Ocwen is also required to hire a third-party firm to audit escrow accounts in high-risk areas of the portfolio to determine whether problems still exist around the management of those accounts, and to identify the root cause of the problems.

“The consent order allows both the division and the company to move forward with a focus on what specific steps need to be taken in order to provide consumers with the accurate processing of their mortgage payments, and for improved customer service in the future,” Hall said. “I'm pleased we have reached this agreement.”

Hall added that the settlement requires restitution for any customers identified during the escrow review process who have been harmed by the company’s failure to handle mortgage payments, regardless of whether that harm was caused by a systemic issue or an individual error.

As of June 30, Ocwen had serviced around 1800 mortgages in Montana with a combined principal of over $225 million, according to the Division of Banking.

Over the past three years, the state handled as many as 16 complaints against Ocwen, and required the company to credit more than $51,000 back to Montana borrowers.