Regulators sue Ocwen Financial, say it mishandled mortgages

Last year, Ocwen agreed to pay Washington state a $900,000 fine and agreed to stop servicing its Washington residential mortgages out of its unlicensed overseas offices in the Philippines and India.

Among the many actions taken against Ocwen on Thursday, the Consumer Financial Protection Bureau and Florida's attorney general filed lawsuits accusing the company of making sloppy mistakes at almost every stage of the collections process, inflicting frustration and millions of dollars in added costs on borrowers trying to pay back their home loans. The Florida attorney general has filed a similar suit against the corporation. "DFI is joining other regulators in taking this action to protect the financial interests and rights of Wisconsin consumers". Indeed, the company is unaware of the CFPB conducting any detailed review of Ocwen's loan servicing files.

News of the complaints sent Ocwen's shares plummeting Thursday by almost 54 percent on the Nasdaq. The CFPB's complaint, filed today, alleged the Ocwen "engaged in significant and systemic misconduct at almost every stage of the mortgage servicing process".

Additionally, Ocwen released the following statement: "The substantive allegations in today's suit are inaccurate and unfounded".

Regulators said when consumers complained to Ocwen, the company routinely failed to acknowledge or investigate the consumers' complaints. In fact, just the opposite is true.

You may have read stories this week about loan servicing company Ocwen Financial Corp.

Ocwen Financial Corporation is diversified financial services holding company.

Ocwen submitted a plan to a group of more than 20 state regulators in January to fix the escrow accounts, and said that reconciling the accounts would cost $1.5 billion and be "well beyond Ocwen's financial capacity to fund", according to a North Carolina cease-and-desist order issued Thursday.

That order required Ocwen to retain an independent auditing firm to perform a comprehensive audit and reconciliation of all consumer escrow accounts.

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A spokesman for Ocwen wasn't able to immediately comment on Thursday.

We may be years removed from the robo-signing, foreclosure free-for-all that ensued following the collapse of the housing market, but mortgage servicers continue to screw things up.

This is not the first time Ocwen has been under investigation. Despite significant operating losses from 2014 to 2016 driven by a shrinking portfolio and $171 million of state and national regulatory monitoring expenses, Ocwen generated over $1.4 billion of positive operating cash flow. The company has specialized in subprime home loans over the years. A group of state mortgage regulators blocked the company, which according to the CFPB collected payments on nearly 1.4 million loans as of the end December, from acquiring new business.

In one case, a borrower with a mortgage modification started having her payments rejected.

"It is very embarrassing to come home and see a notice on my door of an impending foreclosure especially when I have made and continue to make my monthly mortgage payments", it quotes the borrower as saying.

The allegedly inaccurate information in REALServicing also led Ocwen to fail in managing certain escrow accounts.

— Failed to properly credit numerous borrowers' loan payments and failed to send accurate statements.

"Ocwen fully cooperated with the CFPB's inquiries, and sought to find a fair and reasonable solution to the extent the CFPB identified legitimate concerns", company officals add.

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