Ocwen admits its substandard servicing is standard in Industry

By K.K. MacKinstry/Lendinglies

During the Multi-State Mortgage Committee’s investigation, Ocwen made an accurate revelation when attempting to justify charges of mortgage servicing failures by claiming that its servicing policies are comparable to other mortgage loan servicing operations.  Truer words have not been spoken, and the entire mortgage loan servicing industry is in shambles because servicers make more money foreclosing than servicing a loan.

Ocwen said that these independent reviews “consistently confirmed Ocwen’s escrow practices are in line with common industry standards for timeliness and accuracy.”  That may be true because ALL loan servicers practice similar predatory and illegal servicing tactics to increase the probability that a homeowner will default. Every homeowner who has a mortgage serviced by Ocwen, Nationstar, CitiMortgage, Wells Fargo, Bank of America, JPMC, EverHome, PHH or any other major loan servicer is at risk of being victimized by their servicer because they follow similar servicing strategies as seen in other investigations and lawsuits.

Ocwen admitted that: “No mortgage servicer is perfect – to the extent mistakes are made, we have a process to identify and remediate consistent with other mortgage servicers.”  Ocwen has thus admitted there is a systematic failure among the servicing industry to properly service loans in a legal manner and they are merely following the herd.  Servicers have proven they are unwilling or unable to cure their defective practices, therefore it is time that consumers demand a complete overhaul of the way mortgage loans are serviced and potential issues managed.  At this point the government has been unresponsive to regulating loan servicing practices and until there are serious financial or criminal penalties the behaviors will go unabated.

According to Ocwen, its efforts to employ third parties to audit its compliance efforts are, “consistent with methods used in other regulatory settlements and with the Multi-State Mortgage Committee’s examination manual practices.”

Ocwen said that it is engaging an independent review firm to conduct that review.

The state banking regulators also accused Ocwen of being unsound financially, a charge that Ocwen disputes.  If they were not financially unsound on Thursday, they certainly were by Friday when the markets closed and Ocwen stock had suffered a 54% decrease in value.

From Ocwen’s statement:

Ocwen disagrees with any allegation it is not financially sound. Despite significant operating losses from 2014 to 2016 driven by a shrinking portfolio and $171 million of state and national regulatory monitoring expenses, Ocwen generated over $1.4 billion of positive operating cash flow.

What Ocwen fails to mention is that Ocwen has incurred huge legal expenses to defend against lawsuits brought by wronged homeowners.  Over the past year, Lendinglies has seen Ocwen back off of pursuing foreclosures when homeowners retained aggressive counsel. Although Ocwen has made huge profits by foreclosing on homes it doesn’t own and reselling those properties, homeowners have concluded through their investigation that Ocwen is little more than a debt-collector who routinely creates documents as needed in order to create the appearance of ownership.  Livinglies in possession of these documents if the MMC has any interest in these illegal practices.

Ocwen said that it provided the state regulators with “remarkable transparency” into its operations, but that still wasn’t enough for the states and is also untrue.  What the state regulators need to investigate is how Ocwen is creating endorsements on notes and fabricating assignments.  Are these activities done in-house or outsourced to third parties?  There must be a paper-trail of this fraudulent activity and employees should be interviewed and an external task force retained to investigate.  Of course, no one wants to reveal the ugly underbelly of modern mortgage loan servicing.

“Ocwen provides a variety of financial information to select individual states as well as the MMC, such as recurring liquidity reports, monthly results, and future financial and cash projections,” Ocwen said in its statement but the MMC was not convinced and proceeded with allegations of wrongdoing.

Another issue brought up by the states is Ocwen’s alleged operating of “unlicensed mortgage servicing facilities in certain states in apparent violation of state licensing statutes over a period of several years.”  Ocwen admitted past issues but claims those issues are now in the past.

“Ocwen has worked diligently to correct perceived licensing concerns and has entered into recent settlements with three states, without admitting or denying wrongdoing,” Ocwen stated. “Ocwen believes it is properly licensed in all states where it conducts business and welcomes the opportunity to demonstrate its compliance to any state regulators who may still have questions or concerns.”  Ocwen must be taking a page from United Airlines’ playbook and denying all responsibility until forced to face the inevitable consequences of its actions.

Ocwen adds that the company has been in “regular communication” with the state regulators in question for the last two years and progress has been made.  Somehow nothing Ocwen says rings of truth.

2 Responses

  1. Ocwen is right about it being political and feel they can say anything like Trump and Mnuchin. Corporations will now twist the truth and this will be used take away our property and rights kust as with health care.

  2. Reblogged this on Mario Kenny.

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