Ocwen Financial (OCN) Could Face Slew of Lawsuits Following NYDFS Settlement

Ocwen Financial (NYSE: OCN) is facing a potential horde of litigation following its recent settlement with the NY Department of Financial Services.

The NY Post noted Friday that state and federal regulators could file suit against Ocwen this year after the firm admitted to a series of internal control issues. About 49 state regulators, the Consumer Finance Protection Bureau, and National Mortgage Settlement monitor could take on the firm.

Last month, Ocwen announced its settlement with the NYDFS. The press release read, in part, Under the terms of the settlement, Ocwen will pay a civil monetary penalty of $100 million to the DFS by December 31, 2014, which will be used by the State of New York for housing, foreclosure relief and community redevelopment programs. The Company will also pay $50 million as restitution to current and former New York borrowers who had foreclosure actions filed against them by Ocwen between January 2009 and December 19, 2014. As previously communicated in the third quarter of 2014, Ocwen recorded a charge of $100 million to increase its legal reserves in anticipation of a potential settlement with the DFS. Ocwen will record an additional $50 million charge in its fourth quarter 2014 financial statements to reflect the final settlement amount.

After nearly 30 years of distinguished service, and as part of the settlement, founder William C. Erbey will step down from his position as Executive Chairman of Ocwen, effective January 16, 2015. Barry Wish, a current director of Ocwen, will assume the role of Non-Executive Chairman on that date.

Shares of Ocwen are flat in early trading.

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