NPA seals third anti-predatory lending pact

By Tracy Leary

Ron Faris, Ocwen CEO, listens as Rev. Eugene Barnes speaks during negotiations with National People's Action leaders at the NTIC offices in Chicago.

CHICAGO –After three short months, NPA and its affiliates finalized negotiations and reached an agreement with Ocwen Financial Corporation – the country’s fourth largest servicer.

Ocwen agreed to partner with NPA groups in a precedent setting agreement that includes:

The creation of Loan Servicing Best Practices. This is a unique commitment and involves NPA community affiliates and housing counseling  partners.

A thorough loan servicing review and repair process through which Ocwen has agreed to respond to complaints within 10-15 days.

The adoption and support of honest lending practices and terms.

The adoption of a radical approach of handling irresponsible lending.

Under this agreement Ocwen actually exceeds Fannie Mae’s debt to income ratio  requirements for bad loans, agreeing to not make loans where that ratio  exceeds 60 percent of the borrower’s monthly income.

In addition, Ocwen agreed Dec. 6 to work with NPA and its affiliates to create a brochure clearly explaining the benefits of setting money aside to cover things like taxes and insurance.

This agreement covers 10 organizations in seven states, and is the most complete of all NPA’s national lending agreements.

The official agreement signing will take place at Ocwen Financial’s West Palm Beach, Fla., headquarters in late February.

Ocwen has committed to attending and making a major announcement at NPA’s National Conference in April.