Fort Lee, N.J., Mortgage Service Firm Agrees to Changes, Federal Monitoring.

Byline: Richard Newman

Apr. 22--A Fort Lee mortgage servicing company will overhaul its procedures as part of an agreement with federal regulators who were reviewing numerous consumer complaints of poor service and unwarranted fees.

Ocwen Federal Bank also agreed this week to increased monitoring by the U.S. Office of Thrift Supervision.

Ocwen in recent years has increasingly specialized in deals with lenders who make home loans to the riskiest borrowers. Ocwen takes on administrative duties -- such as collecting loan payments and corresponding with debtors -- in exchange for a small percentage of the payments. Also, Ocwen gets to keep the fees it imposes on debtors, but critics in several states say those fees have been excessive.

Complaints in some lawsuits accuse Ocwen of failure to provide consumers with information needed to pay off a loan when they want to refinance. The company has also been accused of foreclosing on properties or initiating forced insurance premiums without adequate notice. It has also been sued for allegedly charging late fees for payments that were actually made on time.

The civil complaints are without merit, and the company aims to fight them in court, Paul Koches, general counsel for Ocwen, said Wednesday. The company, which is part of Florida-based Ocwen Financial Group, recently was successful in consolidating the cases around the country into a single federal court in Chicago.

The company admits no wrongdoing in its deal with the Office of Thrift Supervision, and Koches said the agreement is "part of our commitment to excellence in customer service."