For the last 10 years, I have heard hundreds, if not thousands of complaints from homeowners who have been used and abused by one of the nation’s largest nonbank mortgage servicers, Ocwen. This company has a long history of mortgage servicing violations so it is no surprise to me that the Consumer Financial Protection Bureau announced yesterday that they are suing Ocwen Financial Corporation and its subsidiaries for failing borrowers at every stage of the mortgage servicing process.
The CFPB alleges that Ocwen had for many years widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes. The company failed at even the simplest of tasks such as sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. These alleged errors actually benefit Ocwen because they can charge borrowers more fees and make more profit.
Ocwen also illegally foreclosed on struggling homeowners, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.
The CFPB uncovered substantial evidence that Ocwen has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process such as serviced loans using error-riddled information, illegally foreclosed on homeowners, failed to credit borrowers’ payments, botched escrow accounts, mishandled hazard insurance, bungled borrowers’ private mortgage insurance, deceptively signed up and charged borrowers for add-on products, failed to assist heirs seeking foreclosure alternatives, and failed to adequately investigate and respond to borrower complaints to name a few.
“Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” said CFPB Director Richard Cordray. “Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.”
Other state agencies are also suing Ocwen such as the Florida Attorney General and many state financial regulators are also independently issuing cease-and-desist and license revocation orders against Ocwen for escrow management and licensing issues today.
This company has been sued multiple times over the last decade. For example, in 2013, Ocwen reached a $2.1 billion settlement with state regulators to resolve allegations it had far-reaching problems. They company ordered to refund $125 million to foreclosure victims and adhere to significant new homeowner protections.
You can read the full CFPB press release at this link.