Ocwen Tries to Prevent Foreclosures and Other Fairy Tales
There it was in yesterday’s Wall Street Journal. A quote by Ocwen’s chairman, William Erbey. “I want to emphasize that Ocwen takes great efforts to keep borrowers in their homes and avoid foreclosures.” We were shocked at the audacity of that statement, a statement comes on the heels of yet another investigation by NY State banking superintendent Benjamin Lawsky. Last week the state claimed that Ocwen, one of the nation’s largest residential loan servicers, backdated notices telling borrowers they could modify their mortgages. The notices were sent after the modification window had closed.
If misdating legal correspondence isn’t bad enough, the state says that Ocwen only sent the correspondence concerning modifications and curing payment defaults after it was too late for borrowers to take action. The company is also accused of ignoring employee concerns that “letter-dating processes were inaccurate and misrepresented the severity of the problem.”
The state says that Ocwen cultivated a “culture that disregards the needs of struggling borrowers.” The company blamed software errors for the problem. If this was the company’s first problem, Chairman Erbey’s comments might be believable. His comments, however, come after several run ins with New York and after the company agreed to settle with 49 state attorneys general over the way it services home mortgages.
When we first wrote last week about the backdating allegations, we cringed when quoting an industry executive who said, “Think of Ocwen as the SS Prison Guards carrying out the financial holocaust for the large banks.” After reading Erbey’s comments, however, I am beginning to see some truth in those harsh words.
After doing some more research in light of yesterday’s Wall Street Journal article, I found one blogger who wrote,
“Ocwen and its employees just plain didn’t care. There was a huge, problematic error that could have prevented homeowners from keeping their homes, but the loan servicer had already written off the homeowners as losers in the mortgage game.”
Because residential mortgages are mostly backed by taxpayers (the FHA, Fannie Mae and Freddie Mac), callous actions by loan servicers and others in the foreclosure industry may be actionable under the False Claims Act. That law allows the government to collect triple damages against business that defraud the government or a government backed program. The law extends to false statements made to the government and “reckless” conduct. It appears Ocwen may be liable for all three.
The Ocwen allegations present many whistleblower opportunities. In addition to helping combat fraud and keep struggling borrowers in their homes, whistleblowers under the False Claims Act can receive a cash award of up to 30% of whatever the government collects.
If you have inside, original source information about fraud involving residential mortgage servicing or foreclosure practices, give us a call. We have represented whistleblowers in several, billion dollar cases. For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries kept in strict confidence.
May 2017- We are considering multiple lawsuits against Ocwen. Please visit our Ocwen complaint and investigations page for details.