Ocwen is being accused of overcharging borrowers and is being sued (again) by regulators.
Based in West Palm Beach, Ocwen promotes itself as “one of the leading mortgage servicing companies in America.” That’s not an exaggeration: Ocwen services a lot of mortgages here in Florida.
However, lawsuits filed against the company are on the rise, alleging that the company has been engaging in illegal practices. Here’s what you need to know if you have (or had) an Ocwen mortgage.
In the April 2017 lawsuit, Florida AG seeks to bar Ocwen from doing business in the state.
What is a Mortgage Servicer?
A mortgage servicer collects mortgage payments and performs other related services like collection efforts, paying real estate taxes and insurance premiums. Additionally, servicers have the power to file a foreclosure lawsuit against the borrower for failing to make timely payments, as well as other breaches of the mortgage.
Some mortgage servicers also provide loan modification programs to help struggling home owners avoid losing their homes to foreclosure.
What Does Ocwen Do For Florida Home Owners?
Ocwen is a major player in Florida residential real estate financing. This is because after the 2008 Foreclosure Fraud Crisis, Ocwen bought huge amounts of subprime home loans from Florida lenders anxious to avoid loans considered to be at high-risk of default and foreclosure.
Ocwen continued to build its mortgage servicing empire from there. Today, it not only services existing mortgages, but originates home loans and offers reverse mortgages.
It advertises itself as a leader in helping “families stay in their homes” with loan modification programs. Ocwen provides more home loan modifications under the HAMP program that any other lender. It’s no wonder it’s dubbed the country’s “sub-prime mortgage giant” by Bloomberg.
New Lawsuits Filed by Federal Government and State of Florida
Ocwen may be a residential financing powerhouse here in Florida, but that doesn’t mean it can get away with violating the law.
1. Federal Lawsuit against Ocwen for Illegal Foreclosures and More
A few weeks ago, the federal government filed a lawsuit against Ocwen for violation of federal regulations in how the company was servicing mortgages. According to the Consumer Financial Protection Bureau (CFPB), Ocwen had been:
- illegally foreclosing on homes;
- failing to credit mortgage payments to loan accounts;
- adding their products onto their borrowers’ accounts (even though the borrower didn’t approve or know of the additional fees or costs).
Read the 93 page federal complaint here. It is filed in the United States District Court for the Southern District of Florida, West Palm Beach Division, as Case No. 9:17-CV-80495 with Ocwen Financial Corporation and its subsidiaries Ocwen Mortgage Servicing, Inc., and Ocwen Loan Servicing, Inc., being named as defendants. It is based upon federal law.
2. State Lawsuit against Ocwen for Deceptive Trade and Mortgage Servicing Misconduct
Shortly after the CFPB filed its lawsuit, the State of Florida filed a separate lawsuit, alleging “mortgage servicing misconduct” in violation of state laws. This new lawsuit was filed by the Florida Office of Financial Regulation (FOFR) and Pam Bondi, Attorney General for the State of Florida based upon alleged violations of state law.
According to the complaint, Ocwen violated the Florida Deceptive and Unfair Trade Practices Act, the Florida Real Estate Settlement Procedures Act, and Chapter 494 of the Florida Statutes.
FOFR alleges that Ocwen (1) filed illegal foreclosures, (2) mishandled loan modifications, (3) misapplied mortgage payments, (4) failed to pay insurance premiums from escrow and (5) collected excessive fees.
3. Ocwen’s Response
Ocwen denied that any wrongdoing occurred on its part.
The company issued a statement stating that these claims are unfounded and that it works to help borrowers, not hurt them.
What about the 2014 Settlement between Ocwen and Regulators?
In 2014, both the CFPB and 49 states (including Florida) sued Ocwen for bad mortgage practices, which ended in a settlement.
In that settlement agreement, Ocwen paid a $127 Million fine as well as providing another $2 Billion in relief to consumers harmed by its actions.
- This meant that Floridians with foreclosures between January 1, 2009 and December 31, 2012, would be sent money in settlement by the Settlement Administrator, as well as being able to seek additional monetary relief in their own lawsuits against Ocwen should they choose to do so.
- After this 2014 settlement, Ocwen continue to operate as a mortgage servicer in Florida and the rest of the country. The deal didn’t bar Ocwen from continuing to do business.
Now, according to the Florida Attorney General and the CFPB, Ocwen has persisted in unlawful practices. So, the new lawsuits have been filed for “pervasive and systemic” problems in its operations.
Bondi’s office also wants a federal court order that bars Ocwen from servicing mortgage loans here in Florida.
From Pam Bondi: “Enough is enough. Florida’s distressed Ocwen borrowers should no longer have to endure costly servicing errors and unfair practices.”
10 Things You Should Know If You Have (Or Had) A Mortgage Serviced By Ocwen
As described in the 2017 complaints, Ocwen allegedly has engaged in the following (many borrowers are unaware that these things are happening):
- Ocwen has loaded wrong information and inaccurate data into its internal loan servicing system, called REALServicing. It is servicing home loans based upon erroneous information.
- Ocwen has been illegally foreclosing on home owners. In the federal lawsuit, Ocwen is alleged to have wrongfully foreclosed on at least 1000 borrowers. This has happened in several ways, including foreclosing on borrowers who were complying with their new loss mitigation agreements.
- Ocwen has illegally sold homes at foreclosure sales.
- Ocwen has not credited payments to mortgages.
- Ocwen has not sent borrowers accurate statements on mortgage balance, total payments received, etc.
- Ocwen has mismanaged escrow accounts including those that hold payments made toward property taxes.
- Ocwen has failed to pay insurance premiums for borrowers that were to be paid out of the escrow accounts.
- Ocwen has mismanaged private mortgage insurance (PMI) plans for borrowers and borrowers have overpaid.
- Ocwen has enrolled borrowers into its own products without their consent and collected payments from them (deceptive trade).
- Ocwen has mismanaged mortgage accounts involving borrowers who have passed away, including failing to recognize legal heirs and beneficiaries interests and foreclosing on the decedent’s home despite the probate process.
What can you do If You Have Had Dealings With Ocwen?
If you make your mortgage payments each month to Ocwen, then should you be concerned?
If you have…
- a current home loan, then the lawsuits suggest that there may be issues with mortgage balance, your escrow account, or add-ons that you never agreed to buy.
- been subject to an Ocwen foreclosure, then were you a victim of a wrongful foreclosure? Your file will need to be reviewed for legal errors and omissions under state and federal law.
…then you may want to consider one of the following:
1. File Complaint with Regulators
Florida homeowners with concerns about Ocwen mortgage servicing are invited to file a complaint with the Florida authorities at MyFloridaLegal.com or by calling (866) 9-NO-SCAM.
Federal complaints can be filed at FLOFR.com or by calling (850) 487-9687, selecting Option 1.
This will enable you to share in any settlement proceeds that may result from the new litigation.
2. Consider Independent Legal Action
If you feel you’ve been affected by the wrongdoing of Ocwen’s mortgage servicing, you may want to consider filing your own lawsuit and recovering your damages.
What Should You Do?
An experienced Florida Foreclosure Defense Lawyer can help you determine the viability of your claims and how best to proceed. The complaints filed with the government cannot replace filing your own civil claim.
If you are facing an Ocwen foreclosure in Florida, a good piece of advice is to talk with an experienced Florida real estate lawyer to learn about the legal defenses that are available to you. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
Please note: Not every Ocwen mortgage will have violations and not every Ocwen foreclosure will be wrongful. But the only way to determine if you have been a victim of the acts alleged in these two new regulatory lawsuits is to review your individual circumstances and the actions that Ocwen has taken regarding your loan.
For more on wrongful foreclosure, check out the following:
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