Regulators sue Ocwen Financial, say it mishandled mortgages


Ocwen allegedly filed illegal foreclosures, collected excessive fees, mishandled loan modifications and misapplied mortgage payments, according to Florida's offices of the Attorney General and Financial Regulation.

The survival of one of the nation's largest nonbank mortgage servicing companies was thrown into question Thursday as the company was hit with federal and state lawsuits, including a cease-and-desist order in MI, for allegedly failing borrowers with mistakes, shortcuts and other problems that cost some people their homes.

According to the order: The reconciliation of escrow accounts would cost $1.5 billion.

Ocwen Financial Corporation is a financial services holding company which, through its subsidiaries, originates and services loans. The Company's Corporate Items and Other segment includes revenues and expenses of Automotive Capital Services (ACS) and its other business activities. Although she stated she sent the checks in one envelope, Ocwen records showed the company received and processed the payments on different days, the CFPB found.

According to the CFPB's complaint [PDF], since 2014 Ocwen has violated the Bureau's rules aimed at protecting homeowners from questionable practices and a previous consent order [PDF] between the company, the Bureau, and 49 states and the District of Columbia that required Ocwen to revamp its mortgage serving practices.

Mortgage servicing companies are an intermediary between homeowners and the bank that they borrowed the money from.

In November of past year, Altisource received word that the CFPB might take enforcement action in connection with the technology services provided to Ocwen, according to the company's annual report.

"As regulators, we encourage and advise companies to remain compliant with state and federal laws", said North Carolina Commissioner of Banks Ray Grace. The Multi-State Mortgage Committee - consisting of Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington - tracked Ocwen's operations from 2013 to 2015. "We can not allow this to continue".

The cease-and-desist order states that the Multi-State Mortgage Committee, a committee of state mortgage regulators, agreed to address their enforcement actions in a "collective and coordinated manner".

USA and state officials sued Ocwen Financial Corp.

That examination covered the period of January 1, 2013 through February 28, 2015.

The order is the culmination of several years of multi-state examinations and monitoring that revealed the company is unable to accurately reconcile consumer's mortgage escrow accounts, the department said.

The investigation also determined that Ocwen's financial condition was "significantly deteriorating".

In some cases, Ocwen requested more information from borrowers, but foreclosed before the deadline. Ocwen's forward-looking statements speak only as of the date they are made and, we disclaim any obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.

The examination found that Ocwen was "unable to accurately reconcile numerous consumer escrow accounts in its portfolio".

Mortgage escrow accounts are utilized to pay taxes and insurance and hold borrower funds that the company is entrusted to appropriately disburse.