Exhibit 10.1

 

NEW YORK STATE

DEPARTMENT OF FINANCIAL SERVICES 

 

In the Matter of

 

OCWEN FINANCIAL CORPORATION,

OCWEN LOAN SERVICING, LLC

 

 

CONSENT ORDER PURSUANT TO NEW YORK BANKING LAW § 44

 

The New York State Department of Financial Services (the “Department”) and Ocwen
Financial Corporation, the parent company of Ocwen Loan Servicing, LLC
(together, “Ocwen”), (collectively, the “Parties”) stipulate that:

 

WHEREAS, Ocwen is the fourth largest mortgage loan servicer and the largest
servicer of subprime loans in the United States, servicing an unpaid principal
balance (“UPB”) of approximately $430 billion. In New York alone, Ocwen services
nearly 130,000 residential home loans with a total UPB of more than $30 billion.

 

WHEREAS, Ocwen is a New York State-licensed mortgage banker and mortgage loan
servicer, pursuant to the New York Banking Law, and the Department is
responsible for its supervision and regulation;

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WHEREAS, in the last five years, Ocwen has acquired mortgage servicing rights
(“MSRs”) for hundreds of billions of dollars in UPB from several major
servicers, including Litton Loan Servicing LP (“Litton”), Saxon Mortgage
Services, Inc. (“Saxon”), and Homeward Residential Holdings, Inc. (“Homeward”);

 

WHEREAS, in 2010 and 2011, the multistate examinations of Ocwen, Litton, and
Homeward identified numerous and significant violations of New York State laws
and regulations;

 

WHEREAS, on September 1, 2011, in connection with Ocwen’s acquisition of Litton
and amid concerns regarding Ocwen’s rapid growth and capacity to properly
acquire and service a significant portfolio of distressed home loans, Ocwen and
the Department entered into an Agreement on Mortgage Servicing Practices (the
“2011 Agreement”), which required Ocwen to adhere to certain servicing practices
in the best interest of borrowers and investors;

 

WHEREAS, a June 2012 targeted examination of Ocwen revealed that Ocwen violated
the 2011 Agreement;

 

WHEREAS, as a result of Ocwen’s violation of the 2011 Agreement, Ocwen entered
into a Consent Order with the Department on December 5, 2012, which required
Ocwen to retain an independent compliance monitor (the “Compliance Monitor”) for
two years to conduct a comprehensive review of Ocwen’s servicing operations;

 

WHEREAS, the Department and the Compliance Monitor identified numerous and
significant additional violations of the 2011 Agreement, as well as New York
State laws and regulations;

 

NOW, THEREFORE, to resolve this matter, the Parties agree to the following:

 

Facts

 

1.                  Ocwen has grown more than ten-fold in the last several
years. Beginning in 2009, Ocwen significantly expanded its servicing operations
through the acquisition of several major servicers of home loans, as well as the
acquisition of MSRs for hundreds of billions of dollars in UPB. From the end of
2009 to the end of 2013, Ocwen’s servicing portfolio grew from 351,595
residential loans with an aggregate UPB of $50 billion to 2,861,918 residential
loans with an aggregate UPB of $464.7 billion.

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2.                  In 2010 and 2011, the Department participated in a
multistate examination of Ocwen, as well as examinations of Litton and Homeward,
the entities ultimately acquired by Ocwen. The examination of Ocwen identified,
among other things, deficiencies in Ocwen’s servicing platform and loss
mitigation infrastructure, including (a) robo-signing, (b) inaccurate affidavits
and failure to properly validate document execution processes, (c) missing
documentation, (d) wrongful foreclosure, (e) failure to properly maintain books
and records, and (f) initiation of foreclosure actions without proper legal
standing.

 

3.                  The examinations of Litton and Homeward identified
substantial deficiencies, weaknesses, and violations of laws and regulations
relating to, among other things, foreclosure governance, implementation of
modification programs, record keeping, required notifications, and the charging
of unallowable fees.

 

4.                  The examination of Litton also revealed that, prior to
Ocwen’s acquisition of Litton, members of Litton’s information technology staff
falsified documents provided to the Department during the review of Litton’s
information technology infrastructure.

 

5.                  In connection with Ocwen’s acquisition of Litton in 2011 and
in light of the examination findings for both Ocwen and Litton, the Department
sought to ensure that Ocwen had sufficient capacity to properly acquire and
manage a significant portfolio of distressed loans, including the ability to
effectively manage the increased volume and comply with requirements under the
federal Home Affordable Modification Program, internal loss mitigation policies
and procedures, and laws and regulations governing mortgage loan servicing and
foreclosure activities.

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6.                  To that end, Ocwen and the Department entered into an
Agreement on Mortgage Servicing Practices on September 1, 2011, which required
Ocwen to: (a) establish and maintain sufficient capacity to properly acquire and
manage its significant portfolio of distressed loans to ensure a smooth borrower
transition; (b) engage in sound document execution and retention practices to
ensure that mortgage files are accurate, complete, and reliable; and (c)
implement a system of robust internal controls and oversight with respect to
mortgage servicing practices performed by its staff and third party vendors to
prevent improper foreclosures and maximize struggling borrowers’ opportunities
to keep their homes.

 

7.                  In June 2012, the Department conducted a targeted
examination of Ocwen to assess its compliance with the 2011 Agreement and Part
419 of the Superintendent’s Regulations, which governs business conduct rules
for servicers. The examination identified gaps in the servicing records of
certain loans that indicated repeated non-compliance by Ocwen, including: (a)
failing to send borrowers a 90-day notice prior to commencing a foreclosure
action as required under New York Real Property Actions and Proceedings Law
(“RPAPL”) § 1304, (b) commencing foreclosure actions on subprime loans without
affirmatively alleging in the complaint that Ocwen had standing to bring the
foreclosure action as required by RPAPL § 1302, and (c) commencing foreclosure
actions without sufficient documentation of its standing to do so.

 

8.                  The targeted examination also identified instances that
indicated widespread non-compliance with the 2011 Agreement including: (a)
failing to provide borrowers with the direct contact information for their
designated single point of contact, a customer care representative whose role is
to understand each assigned borrower’s circumstances and history to ensure that
the borrower receives efficient and consistent customer care; (b) dual-tracking;
(c) failing to conduct an independent review of loan modification denials; (d)
failing to demonstrate adoption of policies and procedures to effectively track
sanctioned third-party vendors, including local foreclosure counsel; (e) failing
to demonstrate implementation of policies and procedures to verify borrower
information on newly boarded accounts to accurately reflect the status and
current balance of the borrower’s account; and (f) failing to ensure that trial
or permanent modifications granted to borrowers by a prior servicer are honored
upon transfer to Ocwen.

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9.                  Consequently, on December 5, 2012, Ocwen entered into a
Consent Order with the Department, which required Ocwen to retain an independent
compliance monitor for two years. The Consent Order mandated that the Compliance
Monitor, which would report directly to the Department, would “conduct a
comprehensive review . . . of Ocwen’s servicing operations, including its
compliance program and operational policies and procedures.” The review would,
at a minimum, consider (a) the adequacy of Ocwen’s staffing levels, (b) the
robustness of Ocwen’s established policies and procedures, (c) the fairness of
servicing fees and foreclosure charges, (d) the accuracy of borrower account
information, (e) Ocwen’s compliance with federal and state law, (f) borrower
complaints and recordings of customer service, and (g) Ocwen’s compliance with
the Agreement.

 

10.              The Compliance Monitor began work in July 2013.

 

11.              In the course of the Compliance Monitor’s review, it identified
numerous and significant violations of the 2011 Agreement, as well as New York
State laws and regulations.

 

12.              For example, a limited review by the Compliance Monitor of 478
New York loans that Ocwen had foreclosed upon revealed 1,358 violations of
Ocwen’s legal obligations, or about three violations per foreclosed loan. These
violations included:

 

·failing to confirm that it had the right to foreclose before initiating
foreclosure proceedings;

 

·failing to ensure that its statements to the court in foreclosure proceedings
were correct;

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·pursuing foreclosure even while modification applications were pending (“dual
tracking”);

 

·failing to maintain records confirming that it is not pursuing foreclosure of
servicemembers on active duty; and

·failing to assign a designated customer care representative.

 

13.              The Department and the Compliance Monitor also identified,
among other things, (a) inadequate and ineffective information technology
systems and personnel, and (b) widespread conflicts of interest with related
parties.

 

Inadequate and Ineffective Information Technology Systems and Personnel

 

14.              In the course of its review, the Compliance Monitor determined
that Ocwen’s information technology systems are a patchwork of legacy systems
and systems inherited from acquired companies, many of which are incompatible. 
A frequent occurrence is that a fix to one system creates unintended
consequences in other systems.  As a result, Ocwen regularly gives borrowers
incorrect or outdated information, sends borrowers backdated letters, unreliably
tracks data for investors, and maintains inaccurate records.  There are
insufficient controls in place—either manual or automated—to catch all of these
errors and resolve them.

 

15.              For example, Ocwen’s systems have been backdating letters for
years. In many cases, borrowers received a letter denying a mortgage loan
modification, and the letter was dated more than 30 days prior to the date that
Ocwen mailed the letter. These borrowers were given 30 days from the date of the
denial letter to appeal that denial, but those 30 days had already elapsed by
the time they received the backdated letter. In other cases, Ocwen’s systems
show that borrowers facing foreclosure received letters with a date by which to
cure their default and avoid foreclosure—and the cure date was months prior to
receipt of the letter. Ocwen’s processes failed to identify and remedy these
errors.

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16.              Moreover, Ocwen failed to fully investigate and appropriately
address the backdating issue when an employee questioned the accuracy of Ocwen’s
letter dating processes and alerted the company’s Vice President of Compliance.
Ocwen ignored the issue for five months until the same employee raised it again.
While Ocwen then began efforts to address the backdating issue, its
investigation was incomplete and Ocwen has not fully resolved the issue to date,
more than a year after its initial discovery.

 

17.              Ocwen’s core servicing functions rely on its inadequate
systems. Specifically, Ocwen uses comment codes entered either manually or
automatically to service its portfolio; each code initiates a process, such as
sending a delinquency letter to a borrower, or referring a loan to foreclosure
counsel. With Ocwen’s rapid growth and acquisitions of other servicers, the
number of Ocwen’s comment codes has ballooned to more than 8,400 such codes.
Often, due to insufficient integration following acquisitions of other
servicers, there are duplicate codes that perform the same function. The result
is an unnecessarily complex system of comment codes, including, for example, 50
different codes for the single function of assigning a struggling borrower a
designated customer care representative.

 

18.              Despite these issues, Ocwen continues to rely on those systems
to service its portfolio of distressed loans. Ocwen’s reliance on technology has
led it to employ fewer trained personnel than its competitors. For example,
Ocwen’s Chief Financial Officer recently acknowledged, in reference to its
offshore customer care personnel, that Ocwen is simply “training people to read
the scripts and the dialogue engines with feeling.” Ocwen’s policy is to require
customer support staff to follow the scripts closely, and Ocwen penalizes and
has terminated customer support staff who fail to follow the scripts that appear
on their computer screens. In some cases, this policy has frustrated struggling
borrowers who have complex issues that exceed the bounds of a script and have
issues speaking with representatives at Ocwen capable of addressing their
concerns. Moreover, Ocwen’s customer care representatives in many cases provide
conflicting responses to a borrower’s question. Representatives have also failed
in many cases to record in Ocwen’s servicing system the nature of the concerns
that a borrower has expressed, leading to inaccurate records of the issues
raised by the borrower.

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19.              Ocwen’s inadequate infrastructure and ineffective personnel
have resulted in Ocwen’s failure to fulfill its legal obligations. Prior to the
Department’s and the Compliance Monitor’s review, Ocwen did not take adequate
steps to implement reforms that it was legally obligated to implement pursuant
to the 2011 Agreement.

Widespread Conflicts of Interest with Related Parties

20.              The Department’s review of Ocwen’s mortgage servicing practices
also uncovered a number of conflicts of interest between Ocwen and four other
public companies (the “related parties”),1 all of which are chaired by Mr.
Erbey, who is also the largest individual shareholder of each and the Executive
Chairman of Ocwen. In addition to serving as chairman of the board for Ocwen and
each related company, Mr. Erbey’s holdings in these companies total more than $1
billion. Other Ocwen executives and directors also own significant investments
in both Ocwen and the related parties. Yet, Ocwen does not have a written policy
that explicitly requires potentially conflicted employees, officers, or
directors to recuse themselves from involvement in transactions with the related
companies.

 

 

1The related parties are, as of the date of this Consent Order, Altisource
Portfolio Solutions, S.A. (“Altisource Portfolio”), Altisource Residential
Corporation, Altisource Asset Management Corporation, and Home Loan Servicing
Solutions Ltd., and any of their affiliates, predecessors and successors in
interest, both past and present, and any of their officers, directors, partners,
employees, consultants, representatives, and agents or other persons and
entities acting under their control or on their behalf.

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21.              Despite Mr. Erbey’s holdings in these companies, Mr. Erbey has
not in fact recused himself from approvals of several transactions with the
related parties. Mr. Erbey, who owns approximately 15% of Ocwen’s stock, and
nearly double that percentage of the stock of Altisource Portfolio, has
participated in the approval of a number of transactions between the two
companies or from which Altisource received some benefit, including the renewal
of Ocwen’s forced placed insurance program in early 2014.

 

22.              Ocwen’s close business relationship with related companies is
particularly evident in its relationship with Altisource Portfolio, which has
dozens of subsidiaries that perform fee-based services for Ocwen. In one
example, Altisource Portfolio subsidiary Hubzu, an online auction site, hosts
nearly all Ocwen auctions. In certain circumstances, Hubzu has charged more for
its services to Ocwen than to other customers—charges which are then passed on
to borrowers and investors. Moreover, Ocwen engages Altisource Portfolio
subsidiary REALHome Services and Solutions, Inc. as its default real estate
agency for short sales and investor-owned properties, even though this agency
principally employs out-of-state agents who do not perform the onsite work that
local agents perform, at the same cost to borrowers and investors.

 

23.              Conflicts of interest are evident at other levels of the Ocwen
organization. For example, during its review, the Monitor discovered that
‎Ocwen’s Chief Risk Officer concurrently served as the Chief Risk Officer of
Altisource Portfolio. The Chief Risk Officer reported directly to Mr. Erbey in
both capacities. This individual seemed not to appreciate the potential
conflicts of interest posed by this dual role, which was of particular concern
given his role as Chief Risk Officer.

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Settlement Provisions

 

Monetary Payment

 

24.              Ocwen will pay the amount of $150 million as follows:

 

a.       $100 million paid to the Department by December 31, 2014, as a civil
monetary penalty pursuant to New York Banking Law § 44, to be used by the State
of New York for housing, foreclosure relief, and community redevelopment
programs supporting New York’s housing recovery; and    

b.       $50 million deposited into an interest-bearing escrow account by
December 31, 2014, to be paid as restitution to current and former
Ocwen-serviced borrowers in New York, as follows:    

i.$10,000 to each borrower whose home was foreclosed upon by Ocwen between
January 1, 2009, and the date of this Consent Order; and    

ii.The balance of the $50 million to be distributed equally among borrowers who
had foreclosure actions filed against them by Ocwen between January 1, 2009, and
the date of this Consent Order, but in which Ocwen did not complete such
foreclosure.

 

25.              Ocwen agrees that it will not claim, assert, or apply for a tax
deduction or tax credit with regard to any U.S. federal, state, or local tax,
directly or indirectly, for any portion of the amount paid pursuant to this
Consent Order.

 

Borrower Assistance

 

26.              For borrowers receiving payments pursuant to Paragraph
24(b)(ii), Ocwen will evaluate such borrowers for all applicable modifications
and other foreclosure alternatives in light of their improved financial
condition resulting from such payment.

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27.              Beginning sixty (60) days after the date of execution of the
Consent Order, and for a period of two years thereafter, Ocwen will provide upon
request by a New York borrower that borrower’s complete loan file, which
includes all information from all systems, including comment codes, at no cost
to the borrower, regardless of whether such borrower’s loan is still serviced by
Ocwen.

 

28.              Beginning sixty (60) days after the date of execution of the
Consent Order, Ocwen will provide every New York borrower who is denied a
modification, short sale, or deed-in-lieu of foreclosure, a detailed explanation
of the reasons for denial.

 

29.              Beginning sixty (60) days after the date of execution of this
Consent Order, for all New York borrowers who have been reported negatively by
Ocwen to credit agencies since January 1, 2010, Ocwen will provide upon request
at no cost a copy of such borrower’s credit report (including credit scores) no
more than once a year, regardless of whether such borrower’s loan is still
serviced by Ocwen. Ocwen will make sufficient staff available for borrowers to
inquire about their credit reporting and will dedicate the resources necessary
to investigate such inquiries and promptly correct any errors.

 

30.              The Operations Monitor will oversee Ocwen’s compliance with
these borrower assistance provisions and will work with Ocwen to develop
appropriate procedures for such compliance.

 

Operations Monitor

 

31.              The Department will select in its sole discretion an
independent on-site operations monitor (the “Operations Monitor”) that will
report directly to the Department.

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32.              The Operations Monitor will review and assess the adequacy and
effectiveness of Ocwen’s operations. Such an assessment will include but is not
limited to the following areas:

 

a.         Information technology systems and personnel, including with respect
to record keeping and borrower communications;    

b.         Number of personnel and the training and expertise of its personnel
in all servicing operations;    

c.         Onboarding process for newly acquired mortgage servicing rights,
including Ocwen’s ability to onboard newly acquired MSRs without interruption to
servicing newly acquired loans or its existing loan portfolio;    

d.         Controls in identifying and correcting errors made by Ocwen’s
personnel or systems;    

e.         Risk management functions;    

f.         Contracts or proposed contracts with third parties, including but not
limited to related parties;    

g.         Fees charged by Ocwen to borrowers or mortgage investors; and    

h.         The Ocwen borrower experience.    

33.              The Operations Monitor will identify the criteria for
determining what constitutes a “related party” for purposes of compliance with
this Consent Order.

 

34.              The purview of the Operations Monitor will extend to all
matters directly or indirectly affecting New York borrowers, including matters
that affect borrowers in all states or in multiple states that include New York.

 

35.              The Operations Monitor will identify needed corrective measures
to address identified weaknesses and deficiencies in Ocwen’s operations, make
recommendations to Ocwen and to the Superintendent, and oversee implementation
of reforms. The Operations Monitor will also develop benchmarks against which to
assess Ocwen’s progress in complying with recommended corrective measures.

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36.              The Operations Monitor will review and assess Ocwen’s current
committees of the Board of Directors. Ocwen Financial Corporation’s Board of
Directors (the “Board”) will consult with the Operations Monitor concerning,
among other things, the structure, composition, and reporting lines of such
committees, and whether certain committees should be either disbanded or
created.

 

37.              The Board will consult with the Operations Monitor to determine
which decisions should be committed to the specific oversight of the Board’s
independent directors, or a committee comprised of such independent directors,
including, but not limited to:

 

a.         Approval of transactions with related parties;    

b.         Approval of transactions to acquire mortgage servicing rights,
sub-servicing rights, or otherwise to increase the number of loans serviced by
Ocwen;    

c.         Approval of new relationships with third-party vendors;    

d.         Determinations as to whether Ocwen’s servicing, compliance, and
information technology functions are adequately staffed;    

e.         Determinations as to whether Ocwen’s servicing, compliance, and
information technology personnel are adequately trained;    

f.         Determinations as to whether Ocwen’s information technology
infrastructure and ongoing investment in information technology systems are
adequate;    

g.         Determinations as to whether Ocwen is adequately addressing the
issues identified by the Operations Monitor and the Compliance Monitor; and    

h.         Determinations as to whether Ocwen is treating borrowers fairly and
is communicating with borrowers appropriately.

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38.              The Board will consult with the Operations Monitor to determine
whether any member of senior management should be terminated or whether
additional officers should be retained to achieve the goals of complying with
this Consent Order, and all applicable laws, regulations, and agreements, as
well as creating a corporate culture of ethics, integrity, compliance, and
responsiveness to borrowers.

 

39.              Ocwen may acquire MSRs upon (a) meeting benchmarks developed by
the Operations Monitor concerning the adequacy of Ocwen’s onboarding process for
newly acquired MSRs and its ability to adequately service both those newly
acquired MSRs and its existing loan portfolio, and (b) the Department’s
approval, not to be unreasonably withheld. The Operations Monitor will act with
reasonable expedition to develop such benchmarks in consultation with Ocwen.
These benchmarks will address, at a minimum, the following:

 

a.         The development and implementation of a satisfactory compliance plan;
   

b.         The development and implementation of a plan to resolve
record-keeping and borrower communication issues;    

c.         The reasonableness of fees and expenses charged to borrowers and
mortgage investors, including those charged directly or indirectly by related
parties;    

d.         The development and performance of a risk assessment to identify
potential risks and deficiencies in the onboarding process; and    

e.         The development of a written onboarding plan that addresses potential
risks and deficiencies, including testing and quality control review
periodically during the onboarding process.

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40.              The Operations Monitor will semi-annually review and approve
Ocwen’s benchmark pricing and performance studies with respect to all fees or
expenses charged to New York borrowers by any related party.

 

41.              The Operations Monitor will oversee and ensure Ocwen’s
implementation and adherence to the terms of this Consent Order.

 

42.              Within one hundred twenty (120) days of the date of the formal
engagement of the Operations Monitor, the Operations Monitor will submit to the
Parties a preliminary written report of findings, including, to the extent the
Operations Monitor has had the opportunity to develop them, any proposed
corrective measures and associated benchmarks (the “Operations Report”). The
Operations Monitor will submit written monthly action progress reports
(“Progress Reports”) to the Parties. On a quarterly basis, starting ninety (90)
days from the date of the first Operations Report, the Operations Monitor will
issue an Operations Report covering the three-month period immediately
preceding.

 

43.              Ocwen agrees to cooperate fully with the Operations Monitor by,
including but not limited to, providing the Operations Monitor access to all
relevant personnel and records necessary on a real-time basis, including those
at any overseas locations, and including information on business decisions
pertinent to the work of the Operations Monitor currently pending or recently
made by Ocwen management or its Board of Directors, to allow the Operations
Monitor to fulfill its duties.

 

44.              Any dispute as to the scope of the Operations Monitor’s
authority will be resolved by the Department in the exercise of its sole
discretion after appropriate consultation with Ocwen and/or the Operations
Monitor.

 

45.              Ocwen will pay all reasonable and necessary costs of the
Operations Monitor.

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46.              The terms of the Operations Monitor will extend for a period of
twenty-four (24) months from the date of formal engagement which shall be no
later than May 1, 2015. The Department may, in its sole discretion, extend the
engagement another twelve (12) months if the Department determines that Ocwen
has not sufficiently achieved benchmarks identified by the Operations Monitor.

 

Compliance Monitor

 

47.              The Compliance Monitor will remain engaged for at least three
(3) months from the execution of this Consent Order. The Department may, in its
sole discretion, extend the engagement of the Compliance Monitor for a period
not to exceed an additional three (3) months.

 

48.              Following completion of the Compliance Monitor’s engagement,
the Operations Monitor may call upon the Compliance Monitor to perform work that
draws on the Compliance Monitor’s institutional knowledge of Ocwen.

 

49.              Prior to the Operations Monitor’s engagement and for a short
transitional period thereafter not to exceed forty-five (45) days, the
Department may in its sole discretion direct the Compliance Monitor to fill any
of the roles of the Operations Monitor described in this Consent Order.

 

Board of Directors

 

50.              Ocwen Financial Corporation will expand its Board of Directors
by two independent board members (the “Additional Directors”) in consultation
with the Compliance Monitor or the Operations Monitor.

 

51.              The Additional Directors will not own equity in any related
party.

 

52.              Ocwen’s Board will contain no more than two executive directors
at any time.

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Conflicts of Interest

 

53.              With respect to mortgage loans serviced by Ocwen, Ocwen will
conduct semi-annual benchmarking studies of pricing and performance standards
with respect to all fees or expenses charged to New York borrowers or to
investors on New York property by any related party, to determine whether the
terms offered by the related party are commensurate with market rates or, if
market rates are not available, are reasonably related to actual expenses
incurred by the related party. Maximum rates for services that are established
by government-sponsored enterprises or other investors may not be presumed to be
the market rate and may not substitute for actual assessment of market rates.

 

54.              Ocwen will not share any common officers or employees with any
related party.

 

55.              Ocwen will not share risk, internal audit, or vendor oversight
functions with any related party.

 

56.              Any Ocwen employee, officer, or director owning more than
$200,000 equity ownership in any related party will be recused from negotiating,
or voting to approve a transaction with the related party in which the employee,
officer, or director has such equity ownership, or any transaction that
indirectly benefits such related party if such transaction involves revenues or
expense to Ocwen or a related party of $120,000 or more.

 

Management Changes

 

57.              Effective January 16, 2015, William Erbey will resign from his
position as Executive Chairman of Ocwen, his position as Chairman of the Board
of Directors of Altisource Portfolio, his position of Chairman of the Board of
Directors of Altisource Residential Corporation, his position of Chairman of the
Board of Directors of Altisource Asset Management Corporation, and his position
of Chairman of the Board of Directors of Home Loan Servicing Solutions Ltd. Mr.
Erbey will have no directorial, management, oversight, consulting, or any other
role at Ocwen or any related party, or at any of Ocwen’s or the related parties’
affiliates or subsidiaries as of the date of his resignation. Effective at his
resignation, Ocwen’s Board members and management will not disclose to Mr. Erbey
any non-public information about Ocwen that is not available to other
shareholders. In the event that Ocwen discovers a violation of the terms of this
Paragraph, Ocwen will notify the Department of the violation within three (3)
business days of discovery.

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No Indemnification

 

58.              Neither Ocwen, nor any of its parents or affiliates will,
collectively or individually, seek or accept, directly or indirectly,
reimbursement or indemnification, including, but not limited to, payment made
pursuant to any insurance policy, or from any of its parents or affiliates, with
regard to any or all of the amounts payable pursuant to this Consent Order.

 

Breach of Consent Order

 

59.              In the event that the Department believes Ocwen to be in
material breach of this Consent Order (“Breach”), the Department will provide
written notice to Ocwen, and Ocwen must, within ten (10) business days of
receiving such notice, or on a later date if so determined in the Department’s
sole discretion, appear before the Department to demonstrate that no Breach has
occurred or, to the extent pertinent, that the Breach has been cured.

 

60.              The parties understand and agree that Ocwen’s failure to make
the required showing within the designated time period will be presumptive
evidence of Ocwen’s Breach. Upon a finding of Breach, the Department has all the
remedies available to it under the New York Banking and Financial Services Laws
and may use any evidence available to the Department in any ensuing hearings,
notices, or orders.

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Wavier of Rights 

61.              The parties understand and agree that no provision of this
Consent Order is subject to review in any court or tribunal outside the
Department.

Parties Bound by the Consent Order 

62.              This Consent Order is binding on the Department and Ocwen, as
well as Ocwen’s successors and assigns that are under the Department’s
supervisory authority. This Consent Order does not bind any federal or other
state agency or any law enforcement authority.

 

63.              Except as set forth in Paragraphs 64 and 65, no further action
will be taken by the Department against Ocwen for the matters set forth in this
Consent Order, provided that Ocwen complies with the terms of the Consent Order.

 

64.              Nothing in this Consent Order shall excuse Ocwen from paying
required restitution to any borrowers harmed by its improper or illegal conduct,
including the backdating of letters to borrowers. To the extent a borrower
entitled to restitution has received a cash payment pursuant to this Consent
Order, Ocwen may offset such payment against the restitution owed to such
borrower.

 

65.              Notwithstanding any other provision in this Consent Order, the
Department may undertake additional action against Ocwen for transactions or
conduct that: (a) are not set forth in this Consent Order; (b) Ocwen did not
disclose to the Compliance Monitor or the Department in connection with the
Department’s investigation into these matters; and (c) that the Department and
Compliance Monitor were not otherwise aware of in connection with the
Department’s investigation and the work of the Compliance Monitor.

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Notices 

66.              All notices or communications regarding this Consent Order will
be sent to:

 

For the Department:

Daniel Burstein
Executive Deputy Superintendent

Real Estate Finance Division

New York State Department of Financial Services

One State Street

New York, NY 10004

For Ocwen:

Timothy M. Hayes

Executive Vice President and General Counsel

Ocwen Financial Corporation

1661 Worthington Road #100

West Palm Beach, FL 33409 

Miscellaneous 

67.              Each provision of this Consent Order will remain effective and
enforceable until stayed, modified, suspended, or terminated by the Department.

 

68.              No promise, assurance, representation, or understanding other
than those contained in this Consent Order has been made to induce any party to
agree to the provisions of the Consent Order.

 

IN WITNESS WHEREOF, the parties have caused this Consent Order to be signed this
19th day of December, 2014.

          OCWEN FINANCIAL CORPORATION   NEW YORK STATE DEPARTMENT OF
FINANCIAL SERVICES       By: /s/ Ronald Faris   By: /s/ Benjamin M. Lawsky
RONALD FARIS   Benjamin M. Lawsky President and Chief Executive Officer  
Superintendent of Financial Services       OCWEN LOAN SERVICING, LLC          
By: /s/ Timothy M. Hayes     TIMOTHY M. HAYES     Executive Vice President    

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