Ocwen Responds to Suit from CFPB, 21 States

According to a complaint made by the Consumer Financial Protection Bureau (CFPB) and 21 states, Ocwen Financial Corporation “engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.” 

The lawsuit claims that Ocwen serviced loans using error-filled data, illegally foreclosed on at least 1,000 homeowners, failed to credit borrower payments, mismanaged escrow accounts, failed to cancel borrowers’ private mortgage insurance in a timely manner, deceptively signed up and charged borrowers for add-ons, failed to adequately investigate borrower complaints, failed to provide accurate information to new servicers when rights were sold, and failed to assist heirs with foreclosure prevention. Additionally, the complaint alleged that Ocwen did not properly remediate borrowers for harm caused.

“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. “Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.”

Ocwen responded to the suit, calling the CFPB’s actions “politically motivated and a reaction to the change of administration and recent scrutiny of the CFPB’s activities.”

Additionally, Ocwen released the following statement: “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.  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.” 

In a separate statement, Ocwen noted that it "will not sign unfair and unjust consent orders that make impractical demands that no other market participant could rationally accept, and which would harm consumers."

"Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the Company against unfounded claims while continuing to work with State Regulators to resolve any valid concerns," said the statement.

In a separate suit, the state of Florida alleged Ocwen committed errors that caused “significant harm to borrowers.” Twenty other states also followed suit in taking legal action against the lender.

In response to these filings, an Ocwen spokesperson said “We have just received various orders from state mortgage regulators, and are in the process of reviewing them in detail. We will respond promptly to all of the matters raised after a full review.”

Ocwen is one of the country’s largest non-bank mortgage lenders, with a portfolio of nearly 1.4 million loans and a balance of $209 billion.