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The U.S. is worried Ocwen Financial Corp. (OCN) won’t abide by a home-lending industry overhaul that was “designed to protect homeowners from future occurrences of mortgage-related abuse and fraud” when it takes over Residential Capital LLC’s servicing platform as part of a $3 billion deal.
Papers filed in advance of a Nov. 19 bankruptcy court hearing at which Ocwen will seek a judge’s permission to seal the deal say talks are under way, but for now the government plans to object to Ocwen’s acquisition unless Ocwen agrees to honor reforms agreed by ResCap.
Ally Financial Inc. also filed papers saying it is concerned about Ocwen’s willingness to honor the industry settlement, as well as a 2011 consent order with banking regulators.
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