I filed a compliance report with the United States District Court for the District of Columbia (the Court) today that provides the results of my tests on Ocwen’s compliance with the National Mortgage Settlement (Settlement or NMS) servicing standards during the third and fourth calendar quarters of 2014. This report is the first that addresses Ocwen’s compliance on its entire portfolio, which includes both the loan portfolio acquired from the ResCap Parties and all other loans serviced by Ocwen in its mortgage loan portfolio.¹

Ocwen failed four metrics in the second half of 2014. In addition, several metrics with timeline requirements were deemed failures in that time as part of Ocwen’s Global Corrective Action Plan (Global CAP) to address its incorrect dating of borrower correspondence. In all, ten metrics were subject to individual corrective action plans (CAP), the Global CAP or both as of the fourth quarter 2014.

This report covers the results of my professionals’ testing of Ocwen’s performance in the second half of 2014 and the development and implementation of the corrective action plans and Global CAP. Ocwen and my professionals have continued reporting and testing on compliance for the first half of 2015, including providing updates on the status of the corrective action plans and the Global CAP, and their associated remediation plans. I will report on the results of those activities in the near future.

Sincerely,

Joseph A. Smith, Jr.

In the third and fourth quarters of 2014, Ocwen failed four metrics. These were Metrics 7, 23 and 31 during the third quarter of 2014 and Metric 8 during the fourth quarter of 2014.

Additionally, Ocwen and I agreed that seven metrics (Metrics 12, 19, 20, 22, 23, 27 and 30) would be deemed failures due to Ocwen’s letter-dating issues.²  Ocwen is addressing the metrics related to letter-dating issues through a Global CAP that I have approved and the Monitoring Committee has reviewed. I provided an overview of the Global CAP in my last report.

The four metrics that Ocwen failed and that were unrelated to the letter-dating issues are listed here:

Metric 7 evaluates the timeliness, accuracy and completeness of pre-foreclosure initiation notification (PFN) letters sent to borrowers.

Metric 8 tests whether the servicer complied with servicing standards regarding the propriety of default-related fees (e.g., property preservation fees, valuation fees and attorneys’ fees) collected from borrowers.

Metric 23 tests the servicer’s compliance with the requirement to notify borrowers of any missing documents within 30 days of a borrower’s request for a short sale.

Metric 31 tests whether the servicer sent a denial notification to a borrower that included the reason for the denial, the factual information considered by the servicer in making its decision and a timeframe by which the borrower can provide evidence that an eligibility determination was made in error.

Additionally, Metric 29, which was under a CAP due to a Potential Violation detailed in a prior report, resumed testing in the fourth quarter of 2014, which was the cure period. Ocwen passed Metric 29, and this Potential Violation is cured.

The work involved to date has been extensive, but Ocwen still has more work to do. I will continue to report to the Court and to the public on Ocwen’s progress in an ongoing and transparent manner.

I anticipate that Ocwen will complete its corrective actions related to the letter-dating issues and that the IRG will resume its testing of the impacted metrics later this year or in early 2016. I will continue to monitor these important issues closely through the extended term of December 31, 2017, and will report my findings to the public as they are available.