Ocwen Financial Corp. has reserved $12.5 million to put toward a potential settlement with the Consumer Financial Protection Bureau.
Ocwen disclosed the sum Thursday in a filing with the Securities and Exchange Commission. The West Palm Beach, Fla.-based company has been in negotiations with the CFPB to resolve concerns regarding its servicing practices and technology that arose as part of an examination that began in 2014.
"Our negotiations with the enforcement staff of the CFPB could result in a consent order with the CFPB and could entail payment of monetary amounts by us or injunctive relief," the company said in the filing. "We have not reached any agreement with the CFPB and cannot predict whether or when we may reach such an agreement."
Ocwen also noted that the CFPB could bring an enforcement action again the company if the two parties did not reach a settlement. The company also warned that it could not predict if the final amount in a potential settlement could exceed the $12.5 million already set aside. In that case, the settlement could have a material impact on the company's earnings.
"We cannot currently estimate the amount, if any, of reasonably possible loss above amounts that have been recorded as of December 31, 2016," the company added.
Ocwen CEO Ron Faris referred to the filing before it was made public when asked about a potential CFPB settlement during the company's quarterly earnings call Wednesday, saying the company would not comment further.
The servicer
Earlier in February, Ocwen announced it would pay at least $25 million and provide $198 million in debt forgiveness through loan modifications as part of
California authorities also agreed to lift the prohibition on Ocwen acquiring new servicing rights in the settlement. A similar injunction remains in place in New York state.
