Today, April 20, 2017, U.S. and state officials sued
Ocwen Financial Corp., a mortgage service, for its widespread mishandling of mortgage payments
and illegally foreclosing.
The Consumer Financial Protection Bureau press release stated:
"The Consumer Bureau is authorized by law to protect consumers from
unfair, deceptive, or abusive acts or practices by mortgage servicers
of all kinds. In addition, to address widespread problems in this industry,
the Bureau adopted common-sense rules for the mortgage servicing market
that first took effect in January 2014. The rules include strong protections
for struggling homeowners, including those facing foreclosure, and are
meant to stop problems like those found here. The Consumer Bureau has
uncovered substantial evidence that Ocwen engaged in unfair and deceptive
practices and also committed numerous violations of the Bureau rules.
We allege that these violations of the law were significant and systemic,
and that they harmed thousands of consumers.
In another press release, the North Carolina Commissioner of Banks said:
“As regulators, we encourage and advise companies to remain compliant
with state and federal laws. However, Ocwen has consistently failed to
correct deficient business practices that cause harm to borrowers…We
cannot allow this to continue."
Ocwen quickly denied the claims saying, they were "inaccurate and
unfounded." However, its stock price plummeted more than 50% today,
the most in 30 years. A link to the stock price is here:
Ocwen also said, “Today’s suit can only be viewed as a politically-motivated
attempt by the Consumer Financial Protection Bureau to grab headlines
in reaction to the change of administration and recent scrutiny of the
CFPB’s activities," the company said. Apparently, Ocwen is
disgruntled since it submitted a plan to a group of more than 20 state
regulators in January to fix the escrow accounts it screwed up, and said
that reconciling the accounts would cost $1.5 billion, and would be “well
beyond Ocwen’s financial capacity to fund,” according to a
North Carolina cease-and-desist order on Thursday.
The North Carolina cease and desist order also said that if Ocwen properly
accounted for known or anticipated regulatory penalties and required operational
fixes, “it would indicate that Ocwen continuing as a going concern
would be in doubt.” The company’s shares fell as much as 61
percent to $2.12 at one point today.
Ocwen had been growing rapidly after the financial crisis, From 2009 through
the end of 2013, its business jumped eight-fold, as measured by loans
it was collecting on, according to a separate 2014 consent order from
New York. It seemed to have capitalized when big banks were eager to get
rid of their subprime mortgage servicing. Ocwen came in to fill the gap.
But as Ocwen grew, it got sloppy and improperly foreclosed on borrowers
in some cases, according to legal documents filed by New York regulators
in 2014. That New York order forced William Erbey, then executive chairman,
to step down from his role at Ocwen. Ocwen also agreed to provide $150
million in relief for borrowers in that case.
We are currently investigating Ocwen's credit reporting and debt collection
practices. If you have a situation with Ocwen, or know someone who does,
have them give us a call