Ocwen Financial Executive Chairman To Step Down; Reaches Settlement With NY DFS

(RTTNews) - Ocwen Financial Corp. (OCN) announced that it has reached a comprehensive settlement with the New York Department of Financial Services or "DFS" related to the agency's recent investigation. As part of the settlement, founder William Erbey will step down from his position as Executive Chairman of Ocwen, effective January 16, 2015.

The company noted that Barry Wish, a current director of Ocwen, will assume the role of Non-Executive Chairman on that date.

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 reported 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.

Ocwen has also agreed to non-monetary provisions relating to New York borrower assistance measures, a monitor-led oversight of Ocwen's operations, interactions with related parties and certain corporate governance measures.