Lawsuits: Ocwen still files bad foreclosures
Ocwen Financial Corp., which has faced trouble previously for filing bad foreclosure lawsuits, was hit with similar new lawsuits Thursday.
Ocwen’s errors have resulted in “significant harm to borrowers, including but not limited to improper late fees, inaccurate negative credit reporting, and borrower frustration,” a lawsuit filed by the state of Florida said.
Twenty states filed similar actions, along with the federal Consumer Financial Protection Bureau.
A quick check of Orange County Court records in Orlando shows Ocwen has filed at least 120 foreclosures locally over the past three years, many of which are still pending.
The Florida suit, filed by the state Attorney General and the Florida Office of Financial Regulation, says West Palm Beachbased Ocwen filed illegal foreclosures, mishandled loan modifications, misapplied mortgage payments, failed to pay insurance premiums from escrow and collected excessive fees.
“When Ocwen has sent escrow statements, in many instances the escrow statements have contained inaccurate information pertaining to the borrowers’ account histories, escrow balances, and escrow payments,” the lawsuit said.
The stock price for Ocwen (NYSE: OCN) plunged more than 50 percent Thursday after the lawsuit was filed and a news release was issued.
The company immediately sent out a statement saying it “strongly disputes the CFPB’s claim that Ocwen’s mortgage loan servicing practices have caused substantial consumer harm. In fact, just the opposite is true. Ocwen believes its mortgage loan servicing practices have and continue to result in substantial benefits to consumers above and beyond other mortgage servicers.”
The company said the allegations are “inaccurate and unfounded.”
“The CFPB suit is primarily based on the CFPB’s flawed review of data and its self-serving conclusion about isolated instances where Ocwen self-identified ways we can do better,” the statement said.
The complaint filed in federal court in West Palm Beach alleges violations of the Real Estate Settlement Procedures Act, the Florida Deceptive and Unfair Trade Practices Act and Chapter 494, Florida Statutes.
In 2014, a court approved a $2.1 billion settlement between Ocwen and 49 states, as well as the District of Columbia and the Consumer Financial Protection Bureau, to address allegations of Ocwen’s mortgage servicing misconduct. At the time, Ocwen announced that founder William C. Erbey would step down, after 30 years with the company, from his position as executive chairman of Ocwen.
The new lawsuit says Ocwen’s system of record has widespread problems, and often requires manual fixes, which result in significant errors.
“The Ocwen Defendants willfully disregarded advice from regulators and retain third party auditing firms to update its technology,” the suit says.