In May, we were happy to write that 21 states took action against Ocwen. We hoped that action was the beginning of the end but we also warned that Ocwen seems to have more lives than a cat. Now it seems that Ocwen is back and at least 12 states haven’t even levied a fine. The states may have fallen for Ocwen’s nonsense but homeowners haven’t. Thankfully it will be a jury that has the final say.
If you are looking for hope, keep reading!
To set the stage, in March North Carolina led the charge when 20 states issued “cease and desist” orders against the mortgage servicing giant. These orders came after various state regulators found a multitude of abuses in the way Ocwen services residential mortgage loans.
Two weeks later, Massachusetts became the 21st state to take action. Ultimately, 30 states acted against the company.
The state actions came after years of other regulatory headaches for the company. In December 2013, Ocwen settled with California and agreed to pay $2.1 billion. That settlement was joined by 48 other states.
In 2016, the courts resolved a whistleblower lawsuit filed by two former Ocwen employees who told the Justice Department that the company was flouting HAMP rules. HAMP – short for the Home Affordable Mortgage Program – helps struggling homeowners stay in their homes by offering mortgage modifications. That case settled for $30 million. (Because that case was filed under the False Claims Act, the two whistleblowers are entitled to awards of between $7.5 million and $9 million.)
As happy as we were, we knew that Ocwen wasn’t done. In a response that more resembled fantasy than reality, Ocwen CEO Ronald Farris said:
“One area where we continue to invest is in strengthening our risk and compliance infrastructure. Numerous external and internal compliance reviews over the past year show the strength of our control structure. For example, each of the last four quarters of testing in 2016 by our independent internal review group confirmed that none of the tested National Mortgage Settlement metrics were out of tolerance. Despite recent regulatory allegations, which we believe unfairly characterize our progress and current performance, our recent reviews have not identified past or present systematic issues with our foreclosure sale processes, which is always a last resort for us. I am especially proud of the strong modification results during the quarter which helped over 18,000 struggling families. The financial crisis has not ended for many families in this country, and the Ocwen team continues to provide caring solutions that work.”
“Our recent reviews have not identified past or present systematic issues with our foreclosure practice”? His comments don’t jive with the hundreds of homeowners who have called or written us.
While Farris is telling the world that all is well, the director of the CFPB was one state away announcing that the Consumer Financial Protection Bureau was filing suit against the company for a litany of abusive practices including the wrongful foreclosure of at least 1000 homeowners. Richard Cordray, CFPB’s director, said:
“Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes. Borrowers have no say over who services their mortgage, so the bureau will remain vigilant to ensure they get fair treatment.”
So, what now? Is Ocwen throwing in the towel? Is a new management team coming in to clean up the mess? Not quite. Not even close.
On September 29th, Ocwen disclosed that it has settled with 10 of the 30 states. Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina and Wisconsin have settled with the company according to an SEC filing.
Although there are some variations state to state, the deal requires Ocwen to not acquire any new servicing rights until April of 2018 and that it must replace its problem ridden REALServicing software system. Finally, the company promised to improve how it handles customer complaints.
We have heard those empty promises before.
That’s it. No fines. No restitution to homeowners. No admission of wrongdoing.
The 10 states join Nevada and Indiana which have already settled since the cease and desist orders were imposed. That means by our count, Ocwen was let off the hook in 12 out of the 30 states that took action.
The states were remarkably quiet after the settlement. Perhaps they were embarrassed. Montana was one of the few states that had something to say. Melanie Hall, the state’s banking commissioner, said “The consent order allows both the division [of banking] and the company to move forward with a focus on what specific steps need to be taken in order to provide consumers with the accurate processing of their mortgage payments, and improved customer service in the future.”
Ocwen, of course, released yet another statement saying how committed they are to helping homeowners.
To say we are disappointed is an understatement.
OCWEN Class Action
We don’t want to dampen anyone’s mood on this first Monday of October. Ocwen may be able to tap dance its way out of trouble with regulators but it can’t fool a jury.
In May, we announced our upcoming Ocwen class action lawsuit. The response has been overwhelming. Hundreds of homeowners emailed us with their horror stories. Folks being thrown out of their home when they never missed a payment. The anxiety and sleepless nights. A few people tell us that the stress caused Ocwen’s bumbling handling of their mortgage caused them to seek a divorce.
At this point, our Ocwen class action is focused on the following claims of wrongdoing:
- Use of a proprietary software known to trigger unsupported fees and speed foreclosures (REAL Servicing);
- Knowing use of infirm loan data,
- Illegal foreclosures,
- Failure to credit borrowers’ payments,
- Mismanagement of escrow accounts,
- Manufactured force-placed insurance,
- Delayed termination of private mortgage insurance,
- Charges for additional products without consent,
- Mishandling accounts for deceased borrowers, and
- Failure to correct errors identified by the borrower.
We know we are on the right track since several states have said Ocwen needs to scrap its REALServicing software. (Housing Wire reports that Ocwen’s own head of servicing called the software a “train wreck.”) We also know we are correct because the CFPB has adopted several of our complaints.
It’s been almost a full decade since the housing market crash in 2007 – 2008. Just about every family has been affected. If you didn’t lose your home or find yourself struggling to keep your home, you know someone who has. In the intervening 10 years, the pubic has figured out what companies care and those that don’t. On our personal “naughty or nice” list, Ocwen, Countrywide, Bank of America, and Wells Fargo have special places reserved for them.
We are still looking to hear your personal stories about Ocwen. To share your story confidentially, write to attorney Anthony Dietz at . We regret that we cannot take phone calls as we have been overwhelmed already. We also cannot provide individual representation. If you are facing a pending foreclosure, contact your state bar association’s lawyer referral service to get immediate help.
To learn more about our class action investigation, click here.
Call for Ocwen Whistleblowers
We are not shy in our disgust with Ocwen. That doesn’t mean we believe the people who work there are monsters. Most are hard working, caring individuals who have been given impossible tasks and no tools to perform those tasks properly.
As a leading whistleblower law firm, we are always looking for mortgage and servicing company insiders to serve as whistleblowers. Under the False Claims Act, your inside information may allow you to be eligible for huge whistleblowers awards of between 10% and 30% of whatever the government or we collect from the wrongdoers.
Awards are generally made on a first to file basis. We imagine there are a lot of disgusted people at Ocwen or former Ocwen workers ready to step forward. We can help you evaluate whether you have a case and what that case might be worth. (If it involves Ocwen, it probably is a lot!)
To date, our mortgage whistleblowers have received over $100 million.
We can also work with you to protect you from unlawful retaliation. One advantage of being a whistleblower is the strong protection afforded by the False Claims Act anti-retaliation provisions.
All whistleblower cases are handled on a contingent fee basis meaning there is never a fee or costs unless we recover money on your behalf. All inquiries are protected by the attorney – client privilege and kept confidential. For more information, contact attorney Anthony Dietz at or the author of this post, attorney Brian Mahany at or by phone at (direct).
MahanyLaw – America’s Mortgage Servicer Whistleblower Lawyers
[For an interesting take on bank fraud, this Ted Talk by a former insider is worth the 18 minutes to watch!]