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Ocwen May Gain a New Ally

Gavel BHOn Friday, as part of the the lawsuit between Ocwen Financial Corp. and the Consumer Financial Protection Bureau (CFPB), a Florida judge stated that the U.S. Department of Justice (DOJ) has the power to weigh in on the constitutionality of the CFPB, according to Law360. U.S. District Judge Kenneth Marra said that the DOJ could give additional insight on the question of the CFPB’s constitutionality, following Ocwen’s claims that the single-director structure of the Bureau is unconstitutional.

“In light of defendants’ constitutional concerns, the court finds that it is appropriate and prudent to ask the attorney general of the United States to share with the court its views on the issues raised in defendants’ motion,” Judge Marra said.

Under Obama’s administration, the DOJ attorneys backed the CFPB, however, the Trump administration has expressed interest in limiting the power of the CFPB’s director. The DOJ has already sided with another firm, PHH, in a separate case against the structure of the CFPB.

In April, the CFPB had sued Ocwen after regulators accused the the servicer of causing false foreclosures against over 1,000 people. According to the Bureau, Ocwen’s servicing database has inaccurate and filled with incomplete information, due to poor programming and errors. Court documents showed that in March 2016, 90 percent of the servicer’s loans contained errors.

Judge Marra had rejected a request in April from Ocwen to fast-track its challenge against the structure of the CFPB in June. Ocwen attempted to have the court dismiss the case entirely on the basis that the Bureau cannot take action against mortgage servicers. The bureau rebutted by saying that Ocwen’s arguments were simply a “strawman” to divert the attention of the court.

John Lovallo, a spokesperson for Ocwen, told Law360 that the firm is looking forward to the views of the attorney general.

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.

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