into an agreement with Goldman Sachs Bank, Ocwen Financial Corp. and
Litton Loan Servicing LP regarding certain servicing and foreclosure
practices.
A copy of the Agreement on Mortgage Servicing Practices is available at:
http://www.ins.state.ny.us/press/2011/p1109011_Ocwen_cond_appr_final_sig.p
df
As part of the Agreement, Goldman Sachs will write down approximately $13
million in unpaid principal, consisting of forgiveness on 25 percent of
the principal balance all 60-day delinquent first-lien home loans in New
York serviced by Litton and owned by Goldman Sachs and its subsidiaries as
of August 1, 2011.
The Agreement is a condition of Ocwen's acquisition of Litton, and does
not preclude any future investigations of past practices or release any
future claims or actions. In addition, if any party to this Agreement
agrees with any other regulator to adopt greater consumer protections or
other more rigorous standards than are contained in this Agreement, such
other provisions shall be applicable to the party.
Among other things, the Agreement requires servicing and foreclosure
practice changes in the following areas:
- Document execution
- Accuracy of documentation
- Standing to foreclose
- Identification and contact information of the note holder, and
account/payment history, on request
- Compensation to borrowers, and voiding of third-party sales, in all
wrongful foreclosures
- Regular quality assurance audits of foreclosure and bankruptcy
proceedings
- Oversight of third-party vendors
- Adequate staffing and training
- Single-point-of-contact notices and related requirements
- Toll-free number set up for new loans upon acquisition or transfer of
servicing
- Modification notices
- Independent review of loan mod denials
- Complaint handling and resolution procedures
- Limits on attorneys fees, late fees and delinquency charges, property
valuation fees
- Limits on lender-placed insurance
Ocwen and Litton must implement these requirements within 60 days
following the acquisition. Goldman, which is exiting the mortgage
servicing business with the sale of Litton, has agreed to adopt these
servicing practices if it should ever reenter the servicing industry.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: RWutscher@mtwllp.com
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