How Can I Sue Ocwen?
[Newly updated December 2019] The title of this page says it all – “Ocwen Fraud.” Never have we encountered a mortgage loan servicer with so many problems. Problems that can only be described as fraud. We have spoken with dozens of homeowners as well as a few present and former Ocwen workers. The company is a failure and needs to be held accountable. Immediately.
MahanyLaw is teaming up with lawyers across the United States to bring Ocwen to justice. To bring justice to homeowners struggling to stay in their homes. In many instances, the homeowners have done nothing wrong yet they fight a daily battle of unanswered phone calls, conflicting information, unprocessed loan modifications and illegal foreclosures.
It’s not the employees of Ocwen who are causing the problem. They are saddled with policies and communication systems designed to fail. The company’s REALServicing platform is hopelessly outdated and not equipped to deal with hundreds of thousands of loans.
If you ever called Ocwen’s customer servicer number and got the feeling that the “right hand doesn’t know what the left is doing,” you are right. Employees tell us that they are understaffed and that they have no systems in place to know what other customer service reps have done on a file or what advice may have been given previously to a caller.
One former employee says that documents requested form homeowners are routinely shredded because no one is available to review them.
In late April of 2018, 20 states took aim at Ocwen and blocked the company from handling any more mortgages in their states. Massachusetts became the 21st state on April 30th and in May, Texas joined the growing list of states that have said, “Enough!” to Ocwen foreclosure fraud.
The states can stop Ocwen from handling mortgages within their borders but that doesn’t help the over one million homeowners still left hanging. Sadly, al of the states that had blocked Ocwen soon had a change of heart after Ocwen promised to do a better job servicing loans.
MahanyLaw is investigating Ocwen and hopes to file one or more national class action complaints against the company within coming weeks.
Specifically, we are investigating the following allegations 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.
Filing a class action, however, isn’t easy. Supported by industry, Congress has thrown up some pretty big roadblocks. The so-called Class Action Fairness Act only seems to be fair to banks and big business.
Under the Act, class action cases can only be brought if there is significant “commonality” in the damages suffered by class members. That means illegal foreclosures probably can’t be brought as a class (every homeowner has different damages). What may be successful, however, is a class where everyone was wrongfully charged the same late fee.
Ocwen and Loan Servicing
Ocwen is the largest residential mortgage servicer in the United States. It services hundreds of billions of dollars of home loans. Customers have no choice in who services their loan.
Years ago, banks held their own mortgages. You borrowed money from a bank and for the next thirty years would make your payments to that same bank. No more. Most residential mortgages are sold immediately after closing. They are purchased by institutional investors and pooled into a trust. The trust then chooses who will service the loan.
By servicing, we mean the company that collects mortgage payments, insures taxes are paid, makes sure the property is insured, handles customer service inquiries, processes loan modification requests and if necessary, handles foreclosure proceedings.
As a servicer, Ocwen gets paid by the holder of the note. In home mortgage cases, that means the trust that purchased the loan from the original lender.
Ocwen also makes money from the charges it passes on to homeowners. That means late payment fees, force placed insurance, property maintenance, title searches and the like. In the words of one expert, “Because servicers are permitted to retain ancillary fees, they have an incentive to charge borrowers as much in fees as they can, even if the fees are not provided for by the mortgage loan documents or a direct contract.”
According to one of the members of the Board of Governors of the Federal Reserve, “The servicer makes money, to oversimplify it a bit, by maximizing fees earned and minimizing expenses while performing the actions spelled out in its contract with the investor. . . The broad grant of delegated authority that servicers enjoy under pooling and servicing agreements (PSAs), combined with an effective lack of choice on the part of consumers, creates an environment ripe for abuse.”
We agree. In our opinion, Ocwen has taken fraud and abuse to a new level.
We hoped that Ocwen had finally met its demise in 2015. That year investors sold off their stock in the company causing the company’s value to plummet. Over one hundred trusts holding $82 billion of mortgages gave Ocwen the boot. Their reasons?
- Using trust funds to pay off Ocwen’s obligations owed under a regulatory settlement. Instead of paying what they owe, the trusts say that Ocwen pushed the payments onto them;
- Gross conflicts of interests. Ocwen used corporate affiliates such as Altisource and Home Loan Servicing Corporation to further enrich itself and hurt borrowers and the trusts;
- Failing to comply with foreclosure and consumer protection laws;
- Engaging in illegal and improper loan modification and advance recovery practices;
- Improper records practices;
- Failing to properly communicate with borrowers; and
- Failing to properly pay the trusts.
In other words, it isn’t just homeowners who claimed they were the victims of Ocwen fraud. It is the investors who own the loans too.
Despite almost going under in 2015, Ocwen seemingly rose from the ashes. Unfortunately, its behavior and the way it treated homeowners didn’t improve.
December 2019 Update
An Ocwen Success Story!
Discussing how to sue Ocwen is great. Today we get to share a success story. One that should inspire those barely hanging on and ready to give up.
An Illinois woman who saved her home in bankruptcy thought her ordeal was over. She made all her payments and was able to emerge from bankruptcy not owing Ocwen and still with her home. Anyone knowing Ocwen probably knows where this story is going. For four long years even after the homeowner was paid up and out of bankruptcy, Ocwen continued to threaten her.
Finally she had enough.
Instead of going on the defensive like most homeowners trying to protect her house, she brought suit against Ocwen. And an Illinois jury awarded her $582,000 plus an additional $3 million in punitive damages.
Despite a federal appeals court reducing the award by about 50%, the appeals court upheld the finding of wrongdoing and the awarding of punitive damages. In the words of the court, “We are not sure how many human errors a company like Ocwen gets before a jury can reasonably infer a conscious disregard of a person’s rights, but we are certain Ocwen passed it. The record is replete with evidence that Ocwen’s servicing of Saccameno’s loan was chaos from the moment Ocwen began working on the loan in 2011 to the day of the jury’s verdict nearly seven years later…”
CALL FOR HOMEOWNER VICTIMS OF OCWEN LOAN FORECLOSURE FRAUD
We are seeking stories from homeowners who have been the victims of Ocwen loan servicing and foreclosure fraud. Your stories will help us prosecute anticipated class action and RICO (Racketeer Influenced and Corrupt Organizations Act) charges against the company.
In 2014, we helped the government recover a historic $16.6 billion against Bank of America. In our opinion, Ocwen is a worse corporate citizen than Bank of America. Ocwen’s fraud against homeowners needs to be stopped immediately. Thousands of homeowners may lose their homes without immediate action and thousands more may have paid too much.
If you are a lawyer representing homeowners in foreclosure defense matters, we certainly want to hear your stories as well. The key to successfully prosecuting companies like Ocwen is documentation. If you have a borrower with good documentation of their dealings with the company, let us know.
Ocwen relies on home owners being disorganized. If you have return receipts, a phone log of your calls to Ocwen or a diary of your dealings with the company, please contact us. Your materials could help us bring Ocwen to justice once and for all.
*By calling for stories we are not implying or suggesting we can provide representation to individual homeowners. We are primarily a class action and whistleblower firm. We do not handle residential foreclosure defense or loan modifications. Your stories help us determine future class actions.
CALL FOR OCWEN INSIDERS
MahanyLaw is one of the premier whistleblower law firms in the United States. We have helped mortgage company insiders collect over $100 million in awards in recent years. If a lender or servicer is defrauding Fannie Mae, Freddie Mac, the VA or the FHA, substantial cash awards may be available for insiders.
More importantly, your help with our anticipated RICO case against Ocwen would benefit tens of thousands of struggling homeowners. Unfortunately, we can’t pay witnesses for their information but coming forward is certainly the right thing to do. Even if it is to supply deep background or confidential information, the help is certainly appreciated.
Update Feb. 2018. Ocwen made a surprise announcement that it is acquiring rival loan servicer PHH Corp (PHH Mortgage and PHH Home Loans LLC). Unfortunately, we think that PHH rivals Ocwen in poor servicing practices. To learn more about PHH, visit our PHH Fraud page.
[February 2019 update] We keep hoping that the corporate culture inside Ocwen will improve and the homeowners may get a fair shake. Nothing could be farther from the truth, however.
This week the Justice Department announced that it had fined PHH Mortgage Corporation, a subsidiary of Ocwen, for illegally foreclosing on the homes of active duty U.S. soldiers during their deployment.
Under the Servicemembers Civil Relief Act, a lender must get permission from the court to foreclose on an active duty military member. The law was designed to insure that our fighting men and women have opportunity to defend themselves, especially if they are deployed to a combat zone.
The latest action is one of dozens of regulatory challenges faced by the company including a $2.1 billion fine in 2013 for mortgage servicing misconduct. [Use the search feature on our blog and search “Ocwen” for many more stories of fraud, abuse and regulatory enforcement proceedings.]
MahanyLaw – America’s Ocwen Fraud Lawyers
To report foreclosure fraud or provide confidential tips, please email us at . Unfortunately, we receive dozens of phone calls per day and cannot return Ocwen calls. Only if you are an Ocwen insider, please call attorney Dietz at 248-789-5551. (We apologize in advance that we cannot provide legal advice to individual homeowners.)
Lets Work Together to Make Ocwen Fraud a Thing of the Past.
Please note… we cannot accept individual homeowner cases. There are not enough of us. We are asked daily and the answer is always the same. To the extent we ever take an individual case, it is in our home county and usually handled pro bono (without a fee) on behalf of the area’s indigent legal services provider.
NEW FEATURE: We have added an Ocwen Links page chock full of everything a homeowner or would be whistleblower needs to know.