The prime directive for Ocwen and other servicers is to produce as many foreclosures as possible, erring on the side of foreclosure even where there is a mistake in posting, balance, interest applied, ownership or authority.
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Anyone who has dealt with Ocwen will probably tell you that engaging with them is like swimming through thick molasses. After years of ignoring prior consent decrees without any material changes in their business practices, they are once again faced with extinction, which in my opinion would be a good thing for the marketplace even if it is a bad thing for Ocwen shareholders.
The prime directive for Ocwen and other servicers is to produce as many foreclosures as possible, erring on the side of foreclosure even where there is a mistake in posting, balance, interest applied, ownership or authority. Unlike the hundreds of years of banking process that suddenly changed in the era of “derivatives” they have no interest in correcting their books, giving correct information to the borrower, identifying the creditor, modifying the loan (a workout), or otherwise settling.
They are playing the numbers. 95% of all foreclosures are uncontested because people do not realize they can win their cases and more people would if more people fought back. So the game is to put the contested cases on hold while in uncontested cases fraudulent, forged, fabricated documentation and misrepresentation sails through the foreclosure system, whether judicial or nonjudicial. Hence even if the banks lost ALL of the contested cases they would still have a 95% success rate — unless more people actually stood their ground.
It would be interesting if the CFPB or anyone else got hold of (a) the servicing agreements, if any, that they say supports Ocwen’s role as “servicer” and (b) the email and correspondence before and after the agreement was executed.
And it will be interesting to see what the CFPB does with the “Power of Attorney” that springs up late in litigation because there is no servicing agreement.
It’s been nearly three years since Ocwen Financial agreed to offer $2 billion in consumer relief and pay up to $127.3 million to settle a Consumer Financial Protection Bureau investigation into its servicing practices.
That settlement, and others with the New York Department of Financial Services and the California Department of Business Oversight, are among the items that Ocwen’s executives call the “legacy issues” that Ocwen is working to move past as the nonbank charts a course forward.
But it looks like Ocwen may not be done with the CFPB yet.
Ocwen said Thursday that it is currently under investigation by the CFPB over the company’s mortgage servicing practices, and could be facing a fine and/or other disciplinary action.
Ocwen disclosed the nature and status of the CFPB investigation in its 10-Q filing with the Securities and Exchange Commission, filed as part of the company’s third-quarter earnings release.
Ocwen disclosed the fact that it was facing a CFPB investigation in earlier filings with the SEC, but this latest filing states that the CFPB’s enforcement staff “has been authorized to engage with us regarding the resolution of their concerns” about Ocwen’s compliance with federal servicing laws.
The details of what exactly the CFPB is investigating are scarce at this point, but in a statement, Ocwen spokesperson John Lovallo said that Ocwen is working with the CFPB to resolve these issues.
“We are fully cooperating on these previously disclosed matters,” Lovallo said. “We are committed to resolving all of our remaining legacy regulatory and legal issues.”
According to the SEC filing, Ocwen said that it previously received several “civil investigative demands, or investigative subpoenas” from the CFPB about its servicing practices.
Those civil investigative demands were followed by a “Notice and Opportunity to Respond and Advise” letter from the CFPB, Ocwen said.
In that letter, Ocwen said the CFPB notified the nonbank that the CFPB’s Office of Enforcement was “considering recommending” that the CFPB take legal action against Ocwen relating to the company’s compliance with federal mortgage servicing laws.
According to Ocwen, the CFPB’s NORA letter also stated that Ocwen is permitted to respond with a NORA submission of its own, which is a letter stating the “reasons of law, policy and fact” about why the company does not believe that the potential legal action is appropriate.
Ocwen then made a NORA submission detailing why such action “would not be appropriate.”
Then, according to Ocwen’s filing, the CFPB notified the company that the CFPB’s enforcement staff “has been authorized to engage with us regarding the resolution of their concerns.”
The result of those discussions could be in a consent order and could involve “payment of monetary amounts by (Ocwen) or injunctive relief,” the company said in the SEC filing.
“If we are unable to resolve such concerns, and the CFPB were to bring an enforcement action against us, such action could have a material adverse impact on our business, reputation, financial condition and results of operations,” Ocwen stated.
HousingWire contacted the CFPB for more details on any pending investigations of Ocwen, but a CFPB spokesperson said the bureau does not comment on or confirm potential investigations.
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