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Atlanta-based mortgage servicer Ocwen Financial has responded to a Notice of Nonperformance filed on Friday by law firm Gibbs & Bruns on behalf of investors BNY Mellon, Citibank, Deutsche Bank, HSBC, US Bank, and Wells Fargo, accusing the investors of pushing homeowners to foreclosure. The nonperformance notice accuses the servicer of failing to collect on 119 residential mortgage-backed securities trusts with an original balance of more than $82 billion.
Ocwen's response called the investors' effort to stop loan modifications and push foreclosures on homeowners "ill-conceived" and state that "while knee-jerk foreclosures may redound to the special economic interests of your clients, they are not in the best interests of the trusts as a whole, not consistent with industry practice, and therefore prohibited under the servicing agreements." Ocwen attorney Richard Jacobsen wrote that Ocwen sought to service loans that were in the best interests of the trusts as a whole and not simply those that would benefit the investors economically.
FHFA Director Mel Watt is scheduled to testify before the U.S. House Committee on Financial Services on Tuesday in a hearing entitled Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency. Watt is expected to defend his decision to lift the suspension of allocating Fannie Mae and Freddie Mac's funds into the Housing Trust Fund and Capital Magnet Fund. The move was praised by progressives who see it as a path to homeownership, but it was heavily criticized by members of the GOP such as HFS committee chairman Jeb Hensarling, who say the move puts taxpayers at risk.
