The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Ocwen Financial Corp.
and its subsidiaries, accusing the company of “failing borrowers at every stage of the mortgage servicing process.” The CFPB noted that the Florida Attorney General and “many state financial regulators” were taking separate legal actions against the West Palm Beach, Fla.-based company.
Among its allegations, the CFPB accused Ocwen of serviced home loans
with “error-riddled information,” illegally foreclosing on homeowners, failing to credit homeowner payments, mismanaging escrow accounts and hazard insurance, delaying the cancellation of private mortgage insurance, deceptively signing up and charging borrowers for add-on products, failing to assist heirs seeking foreclosure alternatives, not offering a property response to borrower complaints, not providing complete loan information to new servicers, and making no effort to remediate borrowers that fell victim to its alleged errors.
Ocwen replied in a press statement
, “Ocwen 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 substantive allegations in today’s suit are inaccurate and unfounded. Indeed, the company is unaware of the CFPB conducting any detailed review of Ocwen’s loan servicing files. Rather, 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.”
CFPB Director Richard Cordray stated, "Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes. Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment."
The CFPB did not announce what type of financial penalty it was hoping to achieve in its lawsuit.
“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,” said Ocwen. “Indeed, Ocwen continued to work with the CFPB until the suit was filed. Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the Company against these unfounded claims.”