Home / News / Foreclosure / Lawsuit Accuses Servicer of Illegally Marking Up Default Servicing Fees
Print This Post Print This Post

Lawsuit Accuses Servicer of Illegally Marking Up Default Servicing Fees

Ocwen Financial lawsuitAtlanta-based mortgage servicer Ocwen Financial is facing trouble again, this time from a lawsuit accusing the company of illegally marking up its default servicing fees, according to court records.

The civil lawsuit, which was filed in the U.S. District Court, Eastern District of California, as David Weiner vs. Ocwen Financial Corporation and Ocwen Loan Servicing LLC, is seeking class action status.

"This case concerns fraudulent practices committed by Ocwen in connection with its home mortgage loan servicing business," the plaintiff wrote in the complaint. "Taking advantage of the economic downturn and the increasing number of loans in default, Ocwen devised a scheme to deceive homeowners who are behind on their mortgage payments into paying, or believing they have to pay, hundreds or thousands of dollars in unlawfully marked-up fees."

The suit alleges that Ocwen used one of its affiliate companies, Altisource, and third-party vendors to illegally generate "fee income and larger profits for Ocwen and its affiliates."

According to the lawsuit, "Ocwen’s unlawful loan servicing practices exemplify how America’s lending industry has run off the rails."

Ocwen, the nation's largest non-bank mortgage servicer, has come under extreme scrutiny for its practices in the last year. In December 2013, the Consumer Financial Protection Bureau ordered Ocwen to pay $2 billion in relief to underwater borrowers plus $125 million in refunds to foreclosure victims over a series of alleged servicing errors and illegal servicing activities. Last month, the New York Department of Financial Services announced that an investigation of Ocwen revealed that the company had sent 7,000 backdated foreclosure notices to borrowers after their payment deadline had passed.

Also last month, Ocwen executive chairman William Erbey announced that the company was setting aside $100 million for a potential settlement over the backdated foreclosure notices.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

Check Also

Economist: 2023 Will Bring a ‘Significant Shift in Power’

“Those still able to afford homeownership are quickly regaining lost leverage, but this shift to a more balanced market is still in its early stages," said Nicole Bachaud, Senior Economist at Zillow.