Since my last report, my team and I have been working to assess Ocwen’s compliance with the NMS. Our retesting for the first quarter of 2014 of nine metrics that our investigation determined to be ‘at risk’ showed that Ocwen failed one metric (Metric 19) that it had previously reported as a pass but also passed the remaining eight metrics. Metric 19 tests whether the servicer is complying with the requirement to notify borrowers of any missing or incomplete documents in a loan modification application. Ocwen has proposed a corrective action plan to address the reasons for its failure, and I am reviewing it.

While our testing continues, Ocwen has taken a number of actions to address previous problems with its internal review group. Specifically, Ocwen replaced the executive who leads the IRG and otherwise reorganized employees, adopted corporate governance principles, and enhanced my access to information. I also created a hotline to allow any concerned employees to contact me directly and anonymously if they see problems. As a result of these actions, I report to the Court that Ocwen internal review group’s independence, competency and capacity have shown measurable improvement.

Throughout my time as Monitor of the NMS, I have made transparency a priority. Although there is still work to be done to ensure Ocwen’s compliance, I felt it was important to report to the Court and to the public as the results of our retesting became available. I will continue to do so until I am satisfied that Ocwen has addressed its noncompliance and independence issues.

In the coming weeks, I will file with the Court a final report on the first two quarters of 2014 that includes the results of the letter dating metrics, as well as the at-risk metrics for the second quarter of 2014. The 27 independent professionals of McGladrey I hired to do this work have worked approximately 15,000 hours to date and are nearing completion of their retesting.