SACRAMENTO, Calif. (AP) — Ocwen Financial Corp. is paying a $2.5 million penalty and submitting to a review by an independent auditor to avoid losing its license to make and service mortgages in California.
The settlement announced late Friday by California's Department of Business Oversight stems from Ocwen's refusal to turn over records sought by state regulators as part of an examination of its lending practices.
The standoff prompted California to initiate proceedings to suspend Ocwen's license, an action that now will be dropped as part of the agreement.
Ocwen won't be able to take on any new customers in California until state regulators are satisfied the Atlanta-based company will promptly respond to future demands for business records.
Ocwen didn't immediately respond to a request Saturday for comment about the settlement.
"We're pleased this frustrating skirmish over what should have been a routine matter is finally resolved," said Tom Dresslar, a spokesman for California's Department of Business Oversight.
This is the second time in a month that Ocwen's alleged misconduct has cost the company.
Just before Christmas, Ocwen reached a $150 million settlement that imposed reforms on its mortgage lending practices. The terms of that deal set aside $50 million for New York homeowners harmed by Ocwen's alleged abuses, including bungled foreclosures. Ocwen founder William Erbey stepped down as the company's executive chairman as part of the New York settlement.
The company's stock has plummeted by more than 70 percent since the New York settlement was announced. Ocwen's shares closed Friday at $6.35.