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64 e last two years have given those working in the housing industry cause to wring their hands. Fluctuating home prices, falling interest rates, and supply issues abound, but nothing has compared to the industry's response to heightened regulation within the housing industry. While many in the industry were resistant to the stringent rules put in place to protect consumers, some are coming around to realizing that some oversight is necessary. Such is the case for Ocwen, one of the nation's largest non-bank servicers, which has recently come under heavy scrutiny. DIFFICULTY ON TWO COASTS News of expanded investigations picked up last fall, when New York Superintendent of Financial Services Benjamin Lawsky's office turned up evidence of backdating problems in Ocwen's communications with borrowers, some of which involved late loan modification updates and foreclosure notices. At the end of 2014, Ocwen entered into a $150 million settlement of the claims Lawsky's office was investigating. Some investors were thrilled by the move from Lawsky, who stipulated that the settlement would be paid in "hard-dollar" money (meaning mortgage modifications don't count toward the total) and could not be claimed for reimbursement or as a tax credit. "We cannot applaud him enough," said Vincent Fiorillo, an executive with DoubleLine Capital LP to the Wall Street Journal. "What it does say is that there's a price to pay for not implementing best practices. You can't pay your debt with someone else's money." Lawsky found a measure of irresponsibility in the handling of the subprime loans that comprise the lion's share of Ocwen's business. As the company and its subsidiaries continued to grow at a rapid clip so did the cost of doing business. According to some reports, in order to run the company efficiently Ocwen would have to spend approximately $24 million. Instead of cutting such a huge check, regulators found that Ocwen decided to use antiquated methods of keeping homeowner records that resulted in inaccuracies with customer data. As part of the settlement, founder and executive chairman Bill Erbey stepped down from his post in January, ending nearly 30 years of service to the company. Barry Wish, a current director at Ocwen, will assume the role of non-executive chairman. Likewise, Ocwen said the settlement was in the best interests of shareholders, employees, borrowers, and mortgage investors. "We are pleased to have reached a comprehensive settlement with the DFS and will act promptly to comply with the terms. We believe this agreement is in the best interests of our shareholders, employees, borrowers, and mortgage investors," the company said in a statement. "We will continue to cooperate with the [New York Department of Financial Services] in the implementation of the terms of this settlement, which we believe will allow Ocwen to continue to focus on what we do best—helping homeowners," In instances like this, housing industry professionals generally take a step back and review best practices so that they can adapt accordingly to rapid expansion. "No longer can you just acquire loans without some measure of responsibility," Ed I N D U S T R Y I N S I G H T / A S H L E Y R . H A R R I S STATE REGULATORS MAKE TROUBLE FOR OCWEN

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