Regulators accuse servicer of abuses
Federal and state regulators unleashed a flood of lawsuits and enforcement orders Thursday against the Ocwen Financial Corp., one of the nation’s largest mortgage servicers, aimed at curbing what they said had been years of flagrant and repeated abuses, including illegal foreclosures, deceptive fees and extensive mishandling of customers’ home-loan payments.
Twenty state mortgage regulators filed or are in
the process of filing enforcement orders intended to limit or freeze Ocwen’s ability to acquire new mortgage loans to service in their states. Servicing a loan involves billing customers and funneling payments to the lender; Ocwen, which is not a bank, specializes in doing so for subprime mortgages — home loans issued to people with less- than- stellar credit.
The company is failing at some of its most basic duties, the state regulators said, and needs to be stopped.
Also on Thursday, the Consumer Financial Protection Bureau and Florida’s attorney general filed lawsuits accusing Ocwen of making sloppy mistakes at nearly every stage of the collections process, inflicting frustration and millions of dollars in added costs on borrowers trying to pay their home loans.
Ocwen denied the consumer agency’s accusations, calling them “inaccurate and unfounded.”
This is Ocwen’s second major run-in with the consumer bureau. In 2013, the company agreed to pay $ 2.1 billion to settle a similar set of charges.
At the time, the company pledged to reform, but instead it has “continued to fall down on the job for borrowers,” said Cara Petersen, a lawyer at the consumer bureau.
More than 580,000 customers have complained to Ocwen about errors in the last two years, according to the consumer bureau.
Ocwen, which collects payments from 1.4 million borrowers on mortgage debt of more than $ 200 billion, said it had just received the state regulators’ orders and would review them.
It said it intended to fight the consumer bureau’s lawsuit and called it “an unfortunate example of overreaching.”