Ocwen Financial Corp. faced major problems throughout 2014. It seems this year will be more of the same. Announced Friday, January 26th, Ocwen will hire outside accountants and pay $2.5 million to the state of California in exchange for the state to halt their bid to suspend the company’s license. California state regulators previously announced Ocwen failed to comply with providing them with loan information as requested.
This latest settlement only covers Ocwen’s failure to provide the files – it does not cover any wrongdoing that those files may contain. Until Ocwen complies with requests for information, the mortgage servicing company will be barred from accepting new customers in California.
Also announced Friday, BlackRock, MetLife and Pimco, three of the largest mortgage bond investors will sue Ocwen for allegedly inappropriately collecting payments on $82 billion of home loans. The three companies sent notice of non-performance to Ocwen and the trustees for 119 residential mortgage-backed securities trusts stating “independent, highly qualified experts determined that Ocwen has failed to perform, in material respects, its contractual obligations as servicer and/or master servicer.” The investors outlined other serious problems including; “wholly improper loan modifications, failure to comply with applicable consumer protection laws, and failure to account for and remit accurately to the trusts cash flows from, and amounts realized on, trust-owned mortgages.”
Investors are seeking $153 million from Ocwen for not recovering the mortgage bond trusts properly and that Ocwen shouldn’t have recouped funds known as “advances” when the loans were modified.
The notice added that Ocwen gave work to their affiliates Altisource Portfolio Solutions and Home Loan Servicing Solutions alleging unnecessary and/or overpriced mortgage servicing hurt the trusts, investors and borrowers. The investors claim more than $1 billion in losses due to Ocwen’s failings.
Earlier on Friday, BlueMountain Capital Management released a statement saying they delivered a notice of default in securities issued by Ocwen affiliate Home Loan Servicing Solutions.
On December 22, 2014, Chairman Bill Erbey agreed to resign as part of another separate $150 million settlement with New York financial regulators, after Ocwen admitted to violations including foreclosing on borrowers improperly. That settlement sited concerns that Ocwen had an incentive to push borrowers into foreclosure by backdating thousands of letters to borrowers concerning loan modifications and close ties between Ocwen and its affiliated companies.
Under Erbey’s leadership, Ocwen became the largest servicer of subprime mortgages grabbing home loans from banks no longer interested in those loans. Additionally, Erbey will resign from Ocwen affiliates: Altisource Portfolio Solutions, Altisource Residential Corporation, Altisource Asset Management Corporation and Home Loan Servicing Solutions.
Investigations over the past few years into Ocwen’s foreclosure procedures produced extensive loan servicing misconduct including robosigning, charging improper fees, providing false or misleading reasons for denying loan modifications and failure to honor loan modifications agreed to by prior servicers. Ocwen made that $125 million settlement to 49 state attorneys general, Washington D.C. and the Consumer Financial Protection Bureau (CFPB) in December 2013.
January 2015 brought major setbacks to Ocwen, no telling what will happen if California regulators find additional wrongdoings or other states jump in the fray too.
If you have experienced issues with OCWEN, or are facing foreclosure, visit our Foreclosure Defense webpage for more information on how to get help. You may also visit our Website for information on other areas of law, including Tax, Business Law, HOA Defense, Credit Repair & Dispute, Real Estate and more.
Gantenbein Law Firm can also help with your loan modifications or Rule 120 Hearings in Colorado. Contact us at 303-618-2122.