Saturday, 24 June, 2017

Ocwen Financial Halved As CFPB Alleges Failure 'At Every Stage'

Screen Shot 2017 04 20 Ocwen Financial Halved As CFPB Alleges Failure 'At Every Stage'
Juana Turner | 21 April, 2017, 00:17

The Florida attorney general was expected to file a lawsuit against Ocwen today as well, according to CFPB officials on the conference call, and multiple more states have issued or were about to enact cease-and-desist orders, CFPB officials said. The action sent Ocwen's shares plunging about 50 percent.

As Ocwen grew, it failed to properly integrate the systems of businesses it acquired, and improperly foreclosed on borrowers in some cases, NY regulators headed by Benjamin Lawsky said in their 2014 order.

"Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes", CFPB Director Richard Cordray said in a press release.

The CFPB and Florida's actions came within an hour after 20 states, led by North Carolina, filed cease-and-desist orders against the firm and its units, accusing them of mishandling consumer escrow accounts.

Ocwen, in a statement, called the consumer agency's allegations "inaccurate and unfounded" and promised to "vigorously defend" against the lawsuit. The Consumer Financial Protection Bureau said Thursday, April 20, 2017, that Ocwen generated errors in borrowers' accounts, failed to credit payments, illegally foreclosed on homeowners, and charged borrowers for add-on products without their consent.

At the end of a year ago, Ocwen serviced almost 1.4 million loans with an unpaid principal balance of $209 billion, according to the consumer bureau.

"Ocwen failed to properly recognize individuals as heirs, and thereby denied assistance to help avoid foreclosure", the CFPB claims. Almost 60 million shares had traded, a record for a single day of trading.

The North Carolina Office of the Commissioner of Banks said the majority of the state actions stop the firm from acquiring additional mortgage servicing rights or originating loans until Ocwen can properly manage its existing escrow accounts.

"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.

Numerous errors, the CFPB says, came about through Ocwen's flawed proprietary servicing system that the company's servicing head once referred to as a "train wreck". "However, Ocwen has consistently failed to correct deficient business practices that cause harm to borrowers". She later learned the system was off by a few cents in how it calculated her new modified monthly payment, misapplied her payments to the prior month, and caused her to receive delinquency notices.

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