[Ed. Note: Post updated May 2017 with important information for customers with Ocwen serviced loans.]
Just days ago we wrote a blog post aboout Ocwen’s claim that it cares about homeowners and works hard to keep people in their homes. Last weekend Ocwen’s chairman, William Erbey, said, “I want to emphasize that Ocwen takes great efforts to keep borrowers in their homes and avoid foreclosures.” At the time, we expressed shock at the sheer audacity of those claims. It turns out we aren’t alone.
Today the Mortgage Professional America ran a story about Erbey’s other company, Altisource Residential. Although foreclosure rates are dropping nationwide, Altisource recently foreclosed on 1,022 homes. Ocwen is one of Altisource’s biggest clients.
Why is this news? Ocwen has recently been accused by NY’s banking superintendent Benjamin Lawsky of illegally backdating thousands of letters to homeowners saying that they may be eligible for HAMP loan modifications. By the time the letters were received, it was already too late.
Software systems can make mistakes, although this is a serious mistake. A whistleblower within the company, however, claims that Ocwen knew about the bad letters going out but did nothing to fix the problem. That makes this fraud in our opinion.
Ocwen has been in trouble before both with New York State and with the Consumer Financial Protection Bureau. That makes this most recent revelation even more disturbing. Layer on Erbey’s statement about “caring” about homeowners and the company’s actions become farcical.
Ocwen isn’t the only servicer in trouble, although it may be the worst offender. Loan servicers typically bid on servicing projects with banks. In a highly competitive market, some servicers may have bid too low. Others may simply be putting profits ahead of the rights of struggling homeowners.
Whistleblowers serve an important role in these cases. Under both the federal False Claims Act and FIRREA, whistleblowers with inside information about bank fraud may be eligible for millions in award moneys. Indeed, several bank whisteblowers have received over $100 million for their information.
To qualify for an award, whistleblowers must have original source information about a fraud involving a government funded program or involving an FDIC insured bank. Since most residential mortgages are insured by the FHA, Freddie Mac or Fannie Mae, servicing problems that lead to improper foreclosures probably qualify.
MahanyLaw – America’s Fraud Lawyers.
(We represent whistleblowers in several, billion dollar cases against banks, mortgage companies, financial servicers companies and servicers.)
May 2017 – Do you have a loan serviced by Ocwen? You may be entitled to an award for damages. Please visit our Ocwen fraud page for full details.