Ocwen Financial Corp. (OCN) subservices all the mortgage loans for Home Loan Servicing Solutions (HLSS). Mangrove Partners is an investment manager (hedge funds) and one of the largest shareholders of HLSS. HLSS is an affiliate of Ocwen.
Mangrove Partners sent HLSS a letter demanding HLSS terminate its business relationship with Ocwen. Mangrove Partners sites a “dereliction of duty” and said it is “imperative” HLSS terminate its servicing relationship with Ocwen “without delay”.
Mangrove’s president, Nathaniel August added in the letter: “We believe that continuing to expose HLSS to Ocwen-related risks by leaving the Ocwen relationship intact constitutes a dereliction of your duty to the company and a grave risk to all shareholders.”
Mangrove also cited Ocwen’s regulatory troubles, including the recent problems and $2.5 million settlement to the state of California.
Consumer complaints against Ocwen have been pouring into the Consumer Financial Protection Bureau (CFPB) further magnifying the serious problems following Ocwen’s December settlement with regulators.
Ocwen’s $150 million December settlement with the New York Department of Financial Services (NYDFS), found Ocwen’s hodgepodge of technology produced many errors, and that it’s technology systems “are a patchwork of legacy systems and those inherited from acquired companies, many of which are incompatible” according to a consent order signed by Ocwen Chief Executive Officer, Ronald Faris. “Ocwen regularly gives borrowers incorrect or outdated information, sends borrowers backdated letters, unreliably tracks data for investors, and maintains inaccurate records. There are insufficient controls in place – either manual or automated – to catch these errors and resolve them” according to the consent order.
Ocwen was recently downgraded by Fitch Ratings, a highly-regarded global rating agency, from a Level 3 to a Level 4. Level 1 is the highest rating, and the worst rating is a Level 5, making Ocwen just one level away from being the most inferior. Last month, Moodys Investors Service (a leading provider of credit ratings, research and risk analysis) also downgraded Ocwen and its affiliates Altisource and HLSS. The downgrading gives an extremely negative outlook for these companies.
As we reported earlier, investigations over the past few years revealed 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. As of two months ago, Ocwen employed over 15,000 people, of which, more than 70% are outsourced.
If you had problems with OCWEN, regarding either your loan modification or mortgage, contact the Gantenbein Law Firm. Gantenbein Law Firm's attorneys can also help you with your foreclosure, loan modification, tax, business, real estate, and other legal needs. For more information, visit our website or call 303-618-2122.