Mortgage-servicing company Ocwen Financial Corp., which has faced regulatory scrutiny for its interactions with related companies, will pay a $2 million penalty in a settlement with the Securities and Exchange Commission.

Ocwen previously said it accrued $2 million for an expected pact.

The SEC said on Wednesday that Ocwen used a "flawed, undisclosed methodology" to value mortgage assets and said the company's internal controls "failed to prevent conflicts of interest" involving its former chairman.

New York state regulators, which had criticized Ocwen's relations with affiliated companies and its practices regarding distressed mortgage borrowers, forced Chairman William C. Erbey to step down as part of a settlement announced in late 2014.

The company has been working to sell some of its mortgage-servicing rights and concentrate on mortgages not owned by government agencies. It has been cutting jobs and in September announced plans to cut about 10% of its U.S. workforce.

It narrowed its loss during the third quarter, though the company posted a 21% drop in revenue.

(END) Dow Jones Newswires

January 20, 2016 17:55 ET (22:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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