Ocwen’s Many Evils - Systematic Abuse of Struggling Homeowners

Last April, the Consumer Financial Protection Bureau announced a lawsuit against Ocwen and its subsidiaries for “failing borrowers at every stage of the mortgage servicing process.” The CFPB’s statement claimed that “Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes,” botching “basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance,” and foreclosing on struggling borrowers, ignoring multiple customer complaints, and selling off loan servicing rights without properly disclosing its numerous mistakes.

Following the CFPB’s announcement and enforcement orders from 22 US states, Ocwen stock plunged, and the victims of Ocwen’s many mishandlings and unlawful dealings began to step forward. Both federal and state regulators followed up with numerous lawsuits targeting Ocwen’s deceptive fees and illegal foreclosures, among many other violations by the corporation often described as a “subprime mortgage giant.”  

Today, one of the hottest Google searches for all things Ocwen is, “why is Ocwen still in business?” The state regulators in particular tried to limit Ocwen’s ability to continue conducting business as usual. Numerous state mortgage regulators issued cease and desist orders to limit Ocwen’s ability to acquire new mortgage loans in their jurisdictions.

So, what is a subprime mortgage? Simply put, it is a home loan issued to individuals with a less-than-perfect credit record. It is possible to service this type of mortgages and adhere to the law, but Ocwen has been doing exactly the opposite of that for years.

In 2002, Ocwen faced a $1.5 billion class action suit over improper late charges and fees. 57 victims of Ocwen’s mishandlings came forward to join plaintiff Kweku Hanson. The suit was settled for an undisclosed -but likely substantial- amount. 

In 2013, Ocwen paid $291 million to settle a lawsuit over mortgage servicing misconduct in California. In that same year, in another agreement to settle similar allegations with 49 states, involving people who lost their homes between 2009 and 2012, Ocwen was forced to pay $2.1 billion. According to the Director of the CFPB, "OCWEN took advantage of borrowers at every stage of the process,"

Ocwen’s standard practices, which have caused many inadvertent consumers to lose their homes, were a major catalyst for the 2008 crisis. The loan servicing giant, however, has continued to carry out its faulty behavior, and the latest batch of lawsuits against it relate to post-crisis incidents.

While Ocwen continues to deny charges, more and more evidence keeps coming to light, exposing its ruthless infliction of millions of dollars in added costs on innocent borrowers who were attempting to pay back their home loans.

Since the $2.1 billion settlement was reached, Ocwen has promised to change and reform, but it has continued to let down thousands of borrowers, who are now rightfully demanding justice.   

The Consumer Bureau’s statistics indicate that well over half a million consumers have complained to Ocwen about errors over the last two years; the kind of errors that could cost someone their home. 

At the time of the Consumer Bureau’s lawsuit in April, Ocwen handled $200 billion in mortgage debt, collecting payments from over 1.4 million individuals. The potential for damage is enormous, especially in the case of a loan servicer that is known for its many “mistakes” and systematically deficient business practices.

Let us look more closely at what those practices have been and, in many cases, continue to be. According to the investigation that led to a past settlement, OCWEN harmed consumers by:

●      failing to timely and accurately apply payments made by borrowers and failing to maintain accurate account statements;

●      charging unauthorized fees for default-related services;

●      providing false or misleading information to borrowers regarding loans that had been transferred from other servicers;

●      failing to provide accurate and timely information to borrowers who sought information about loss mitigation services, including loan modifications;

●      misrepresenting to borrowers that loss mitigation programs would provide relief from the initiation of foreclosure or further foreclosure efforts;

●      improperly denying loan modification relief to eligible borrowers;

●      providing false or misleading reasons for denial of loan modifications;

●      with respect to transferred loans, failing to honor in-process trial modifications agreed to by prior servicers; and

●      robosigning affidavits in foreclosure proceedings

Source: Consumer Financial Protection Bureau


For a practical example, let’s look at a cease and desist order filed by the state of North Carolina. The order referred to customer escrow accounts, where borrowers deposit funds that are meant to cover, for example, property tax. Regulators found that Ocwen was often paying those property taxes and home insurance fees with delays, which made their customers incur late fees and other difficulties. When confronted, Ocwen claimed that if they were to disburse the funds immediately, they would go bankrupt, as many a financial industry fraudsters will argue, when they want to play with their customers’ money, while putting their assets at risk.

Even Ocwen executives have referred to their technical systems as a “train wreck,” and yet Ocwen and its many subsidiaries are still harming American consumers. 

Most of Ocwen’s victims never chose to have a consumer relationship with them. Their bank transferred their loan to Ocwen, and they were stuck with it, which in many cases led to foreclosures that shouldn’t have been, and fees that should not have been collected.  

People who have made their mortgage payments regularly and in a timely manner have gone home from work to find a foreclosure sign on their door. Simply because Ocwen doesn’t know how to properly service mortgage loans, or doesn’t want to know. Naturally, the profit is always for Ocwen, the losses for its customers.

Following one of Ocwen’s many multi-million dollar settlements, this time with New York’s Department of Financial Services, Ocwen’s chairman William C. Erbey stepped down from his position. Unfortunately, with or without its founder, Ocwen has continued to offer a subprime service for its large portfolio of “subprime” mortgage loans.

Are you a current or former Ocwen customer? We are currently looking for victims of Ocwen loan servicing fraud in many different categories. Please see our current Ocwen Fraud Investigations page to see if you may qualify for relief.

MahanyLaw – America’s Ocwen Fraud Lawyers

To report foreclosure fraud or provide confidential tips, please contact us immediately. Homeowners should email Attorney Anthony Dietz at [hidden email]. If you are a present or formal Ocwen employee and are interested in receiving a whistleblower award or simply want to provide confidential assistance, please call or write Anthony. (Anthony Dietz 248-789-5551)

Unfortunately, we receive dozens of phone calls per day and cannot return every call. Unless you are a current or former employee of Ocwen, please write to us for the quickest response.

Please Help Us Make Ocwen Fraud a Thing of the Past.