NEW YORK (TheStreet) --Shares of Ocwen Financial Corp. (OCN) are lower by 15.68% to $13.50 in mid-morning trading on Tuesday, as the stock continues to tumble following yesterday's announcement the company has reached a settlement with the New York Department of Financial Services, that stipulates founder and executive chairman William Erbey will step down.
Ocwen has been accused of mishandling foreclosures and abusing delinquent borrowers, the Wall Street Journal reported yesterday.
As part of the agreement the mortgage company will pay a penalty of $100 million to the DFS by December 31, 2014, and an additional $50 million as restitution to current and former New York borrowers who had foreclosures filed against them by Ocwen, between January 2009 and December 2014.
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Additionally, terms of the agreement say that an outside monitor will come in to scrutinize the company's activities and will lead the "oversight of Ocwen's operations, interactions with related parties, and certain corporate governance measures," the company said.
Ocwen will not be able to make any MSR acquisitions unless it meets specific benchmarks and DFS approval.
The company's shares retreated by 27% on Monday, due to the DFS settlement announcement, the Journal noted today.
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Separately, TheStreet Ratings team rates OCWEN FINANCIAL CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: