WASHINGTON — One of the nation’s largest mortgage servicers was issued a consent order on Tuesday by the Office of the Comptroller of the Currency, citing inadequate risk management controls commensurate with the bank’s size.
Cenlar FSB, a New Jersey-based national bank with $1.1 billion of assets and a little over 3,000 employees, is the country’s largest mortgage sub-servicer, meaning it performs servicing functions on behalf of financial institution clients. Cenlar is also the nation's second largest servicer.
Cenlar's “internal controls and risk management practices do not support the current risk profile and size of the Bank’s mortgage sub-servicing portfolio," the OCC said in its order.
In a statement, Cenlar said it had voluntarily entered into the consent order, which did not require the bank to admit or deny wrongdoing. There was also no monetary penalty.
“We take seriously our regulatory obligations and we are working with the OCC to make any changes necessary to resolve their concerns,” Cenlar said in a statement attributed to its board of directors. “We will continue to serve clients and their customers with our constant commitment to care and excellence as we make improvements to our risk management and control processes”
As part of the consent order, the bank will be required to take “comprehensive corrective actions,” including the implementation of new internal controls that are “appropriate to the bank’s risk profile and the size of its mortgage subservicing operations,” according to an OCC press release.
The OCC reported that it had previously warned Cenlar about “deficiencies” in its risk management program.
Cenlar will also be required to “receive no supervisory objection from the OCC” before adding any new clients to its mortgage sub-servicing business, as well before paying out dividends to shareholders, until the order is lifted at the agency’s discretion, the OCC said.
