Here’s a detailed breakdown of Ocwen’s new restrictions by state

A deeper dive reveals what Ocwen can and can’t do going forward

The servicing issues at Ocwen Financial are allegedly so widespread that some states are placing stricter restrictions on the nonbank, beyond freezing the company’s ability to acquire new mortgage servicing rights.

On Thursday, a group of state business regulators issued joint cease-and-desist orders to Ocwen. The main announcement from the states shows that an examination into Ocwen’s servicing shows “several violations of state and federal law, including, but not limited to, consumer escrow accounts that could not be reconciled and willful and ongoing unlicensed activity in certain states.”

The orders also showed that the regulators are concerned with Ocwen’s ability to continue operating due to financial constraints, an issue that Ocwen denies.

The orders prohibit the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing, a subsidiary of Ocwen, until the company is “able to prove it can appropriately manage its consumer mortgage escrow accounts.”

However, HousingWire analysis of each state’s cease-and-desist order or accompanying press release, show that some states’ regulators are restricting Ocwen’s business much further than that.

In fact, in one state, Ocwen has basically been put of out business entirely.

All in all, Arkansas, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Maine, Massachusetts, Mississippi, Montana, Nebraska, Nevada, North Carolina, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, West Virginia, Wisconsin, and Wyoming each placed restrictions on Ocwen’s business, according to the Conference of State Bank Supervisors.

But several states’ restrictions were not equal to the others– namely Massachusetts and South Dakota.

According to the announcement from the Massachusetts Office of Consumer Affairs & Business Regulation’s Division of Banks, Ocwen is not only no longer allowed to acquire new mortgage servicing rights, the company is also no longer allowed to service mortgages in the state, at all.

Here’s how Massachusetts describes its reasoning for restricting Ocwen’s business:

Of paramount concern is the company’s deteriorating financial condition, in which the company has lost nearly $1 billion since 2014, and will not be profitable by its own estimations for at least two years. The company has not developed or implemented an effective plan to curb these losses.

The examinations and monitoring noted the company has shown ineffective management of consumer escrow accounts and their internal servicing systems.

Therefore, Massachusetts is requiring Ocwen to “develop and implement a plan to transfer its loan servicing activities for Massachusetts consumer mortgage loans to a Division-approved licensed loan servicer(s).”

That means Ocwen can no longer service any mortgages in the state and must work to transfer all current mortgages it services to other servicers.

According to the Massachusetts Division of Banks, Ocwen services approximately 34,472 loans in Massachusetts, representing 3.5% of Ocwen’s portfolio – all of which must be transferred away.

Massachusetts’ order also requires Ocwen to “either fund or place mortgage loan applications in process with other lenders at no loss to applicants, and to cease accepting new applications,” which means no new loans for Ocwen in Massachusetts either.

“The Division will be closely monitoring Ocwen’s compliance with the Order,” the Division of Banks’ order states. “During this time, consumers with mortgage loans serviced by Ocwen should continue to submit loan payments to Ocwen in normal course in accordance with their loan terms. Ocwen will continue to service these loans until an orderly transfer of the servicing is completed in accordance with the Order. Any current mortgage loan applications should continue to be processed.”

South Dakota also placed its own serious restrictions on Ocwen’s business in the state, in the form of halting all foreclosures in the state until the escrow issues are addressed.

Here’s how the South Dakota Department of Labor and Regulation’s Division of Banking described it:

Ocwen does not possess the competence, experience, character, or general fitness required to permit Ocwen to continue to acquire new business as a mortgage lender in South Dakota.

The public interest will be irreperably harmed if Ocwen’s mortgage lending liscense is not conditioned immediately.

Therefore, Ocwen is required to “immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business.”

Ocwen is also required to “immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can provide a third-party audit of its South Dakota escrow accounts showing that borrower funds are appropriately collected, properly calculated, and disbursed accurately and timely, and make any corrections of whatever type necessary to remedy all mistake, errors, and improprieties occurring due to Ocwen’s actions.”

Ocwen is also required to “immediately cease any and all foreclosures in the state of South Dakota until all South Dakota escrow accounts have been correctly and properly balanced and all corrections due to mismanagement of the escrow accounts have been effected.”

Nearly all of the other states list the same restrictions: no new mortgage servicing rights and no new loans to be serviced by Ocwen Loan Servicing, except for Nebraska and Rhode Island, which each expect Ocwen to provide detailed reports on its servicing activity on a frequent basis going forward.

The Nebraska Department of Banking and Finance states that Ocwen is prohibited from “the acquisition of mortgage servicing rights and the origination of mortgage loans until they are able to prove they can appropriately manage their consumer mortgage escrow accounts.”

Beyond that, Nebraska’s order requires Ocwen to provide a list of all the residential mortgages it services in the state, including the name, address, telephone number, and state of residence of the borrower; as well as the loan number; the owner of the loan; the account balance; and the location of any escrow funds.

Ocwen is then required to provide a report on the status of every Nebraska loan it services to the Nebraska Department of Banking and Finance every 10 days.

Ocwen is also required to provide written notice of all servicing transfers within 72 hours of execution.

And in Rhode Island, Ocwen “shall immediately cease from acquiring new mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen, which mortgage loans are secured by Rhode Island property, until Ocwen can provide the Department of Business Regulation with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, properly calculated, and disbursed accurately and timely.”

Ocwen is also required to “immediately cease acquiring mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen, which mortgage loans are secured by Rhode Island property, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities it currently maintains, as well as liabilities it has knowledge it will incur in the course of its business.”

Additionally, Ocwen is required to file written confirmation by 4 p.m. on May 22, 2017, stating that the company has stopped acquiring new mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen for properties in Rhode Island.

Ocwen is also required to provide the Rhode Island’s Department of Business Regulation with the following information: a list of all loans secured by Rhode Island property presently serviced by Ocwen, including the date such loans were originated; a list of all loans secured by Rhode Island property as to which Respondents are acting as a third party servicer, including the date such loans were originated; and a list of all pending acquisitions of servicing rights and applications for mortgage loans that would be secured by Rhode Island property that are in the pipeline.

Below is a list of the remaining states with relevant passages about each state’s restrictions on Ocwen:

ArkansasArkansas Securities Commissioner, B. Edmond Waters, issued a press release in connection with a cease and desist order issued against Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. are ordered to cease and desist from acquiring new mortgage servicing rights and originating new mortgage loans. The order prohibits the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its borrower mortgage escrow accounts.

ConnecticutThe Commissioner finds that the public welfare requires immediate action in order to prevent irreparable and immediate harm to Connecticut borrowers and the necessity of a temporary order requiring Ocwen to cease and desist from violating the laws cited herein, pursuant to Section 36a-52(b) of the Connecticut General Statutes in that, since December 2013, State Mortgage Regulators, including this Department, have been concerned about Ocwen’s mortgage servicing practices including, but not limited to, the misapplication of borrower payments and inaccurate escrow accounting and statements, and that the recent Multi-State Examination and CT Examination indicate that these issues have not been resolved, but rather may be exacerbated.  In addition, Connecticut borrowers have no ability to select a different mortgage servicer to remedy such persistent and pervasive errors by Ocwen.  Considering the potential harm to Connecticut borrowers and Ocwen’s inability to provide sufficient information concerning its existing borrower escrow accounts, the Commissioner finds it imperative that Ocwen cease from acquiring new mortgage servicing rights in connection with Connecticut residential mortgage loans for which it would have to maintain escrow accounts, and acquiring or originating new Connecticut residential mortgage loans serviced by Ocwen for which it would have to maintain escrow accounts, until it can ensure that the escrow accounts of its existing residential mortgage loan servicing portfolio in Connecticut are properly reconciled and that all Connecticut borrowers’ monies are maintained in segregated deposit or trust accounts for the benefit of such Connecticut borrowers.

District of ColumbiaThe majority of the orders prohibit the acquisition of new mortgage servicing rights and the origination of new mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and not further harm consumers. Some orders also require Ocwen to cease any ongoing unlicensed activity.

FloridaFiled a separate lawsuit over Ocwen’s servicing practices.

HawaiiThe Notice of Charges and Proposed Order prohibits the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its consumer mortgage escrow accounts. The Notice of Charges and Proposed Order also demands Ocwen to cease illegal unlicensed activity that is believed to be occurring in Hawaii.

IdahoThe department’s order prohibits Ocwen from violating Idaho law in the handling of consumer escrow accounts. Managing the money that borrowers remit as part of their monthly mortgage payments is critical to the business of a mortgage servicer, and the department’s order requires Ocwen to accurately and lawfully fulfill that function when dealing with Idaho borrowers’ mortgage payments.

IllinoisA search of the Illinois Department of Financial and Professional Regulation did not show record of Illinois’ actions against Ocwen.

MaineOcwen shall immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business; Ocwen shall immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can provide the state regulators with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, properly calculated, and disbursed accurately and timely.

MississippiOLS shall immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by OLS, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business; OLS shall immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new Mississippi residential mortgages serviced by OLS, until OLS can provide the DBCF with a third party audit of its escrow accounts associated with any Mississippi residential mortgage loans demonstrating that consumer escrow funds are appropriately collected, properly calculated, and disbursed accurately and timely; and make any and all corrections of whatever type necessary to remedy all mistakes, errors, and improprieties occurring in the past due to OLS’s Actions.

MontanaThe order prohibits Ocwen from acquiring new mortgage servicing rights until the company is able to establish that it can appropriately manage its Montana escrow accounts. Over the past three years, the Montana Division of Banking and Financial Institutions has handled 16 complaints against Ocwen and required Ocwen to credit $51,368.56 to Montana borrowers. Division officials will now focus on assisting borrowers who currently make mortgage payments to Ocwen.

NevadaThe majority of orders, including the order issued by the Nevada Division of Mortgage Lending, prohibit the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and prevent harm to consumers.

North Carolina Lead state in announcing restrictions.

South CarolinaA search of the South Carolina State Board of Financial Institutions – Consumer Finance Division did not show record of South Carolina’s actions against Ocwen.

TennesseeThe Tennessee Department of Financial Institutions (“Department”) issued today an enforcement action against Ocwen Loan Servicing to prohibit the company from acquiring new mortgage servicing rights or originating mortgage loans in Tennessee until it provides the Department with a plan to demonstrate an ability to operate in a sound manner.

TexasA search of the Texas Department of Savings and Mortgage Lending did not show record of Texas’ actions against Ocwen.

West VirginiaA search of the West Virginia Division of Finance did not show record of West Virginia’s actions against Ocwen.

WisconsinThe majority of orders prohibit the acquisition of new mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and not further harm consumers. Ocwen conducts mortgage loan servicing for approximately 1.5 million consumers nationwide, including about 13,500 in Wisconsin.

WyomingA search of the Wyoming Division of Banking did not show record of Wyoming’s actions against Ocwen.

[Editor’s note: If any of HousingWire’s readers can assist in locating the missing states’ orders against Ocwen, please contact Ben Lane at blane@housingwire.com. This article will be updated as appropriate.]

Sub-Prime Mortgage Servicer Ocwen fabricates Mortgage Documents

Ocwen is the bottom-feeder of mortgage servicing companies.  Most survey’s rank Ocwen as the absolute worst in customer service and accountability including consumer research by J.D. Powers.  Ocwen acts as a debt-collector and our experience at LendingLies is that Ocwen often cannot identify the true creditor or provide any documentation demonstrating who owns the loan.  Ocwen then resorts to fabricating documents and obfuscation to keep the borrower in the dark until they can successfully foreclose.  Why is the CFPB and Multi-State Mortgage Committee not investigating Ocwen’s fabrication of loan instruments?

Last year we had a client from Texas contact us who was dealing with Ocwen.  He had pulled his paperwork and discovered that his loan was one of the Taylor, Bean & Whitaker (TBW) fraudulent transactions, there was no evidence that the note had ever been endorsed, and there were no assignments from TBW to Ocwen.   To overcome these issues Ocwen either photoshopped endorsements or assignments in-house, or went to a third party who creates fraudulent loan instruments and filed to foreclose.

The Lendinglies staff sent a copy of the note and assignment to a forensic document fraud examiner and he discovered that the “original” copies submitted by Ocwen were nothing more than computer-generated forgeries.  We did a little more investigating and discovered that  the “corrective” assignment of the Deed of Trust was signed by Ocwen employee Amber K. Wilson.

Amber K. Wilson was employed as a Servicing Operations Specialist at Ocwen since May 2015.   Located in Iowa, Amber’s Linked-In profile stated that her current duties included, “Researching Mortgage Documents to verify a full Chain of Title is present. If it is not create the needed Documents (sic). Work from Excel Spread Sheet daily as well as several internal data programs.”  Amber K. Wilson admitted on a public website that Ocwen Loan Servicing creates documents to create a “proper Chain of Title” if there are errors.

This is an admission that Ocwen employees are engaging in fraudulent activity by fabricating notes and assignments (the derogatory information has since been removed from her Linked-In profile but a screenshot of last year’s Linked-In profile is included below). Hopefully the CFPB and Multi-State Mortgage Committee who have filed lawsuits will investigate this type of criminal activity.

It is fraudulent to recreate a chain of assignment with fabricated documents to create the appearance the current servicer has standing. As Neil Garfield has repeatedly pointed out- copies of the note and assignment don’t document an actual transaction (sale, transfer)- they are nothing but window dressing to create the illusion an event occurred.

Our client was a victim of these sham documents Ocwen filed in the Tarrant county records. He has been fortunate enough to find an attorney who has successfully kept Ocwen at bay.  Texas is involved in the multi-state effort to regulate large servicers across the country while ensuring compliance with applicable state and federal law, while protecting consumers.

Amber Wilson’s Linked-In profile where she admits fabricating loan instruments:

David Dayen: The CFPB Just Sued a Crooked Mortgage Servicer, but Indicted Itself

The lawsuit against Ocwen is welcome, but should have happened four years ago.

Injured by Ocwen? Take Action Now!

By K.K. MacKinstry

Ocwen has admitted that its mortgage servicing policies and loan processing systems are a “trainwreck”.  As regulators and the Consumer Fraud Protection Bureau (CFPB) tighten the noose on Ocwen, we recommend that Livinglies readers who have experienced issues with Ocwen contact their state Attorney General offices, the CFPB, state banking regulators and government representatives to express your outrage and share your experience NOW.

Although Ocwen is being investigated for predatory servicing practices, please make regulators aware of the deeper level of fraud that is occurring and consists of fabricating and forging loan instruments including notes and assignments.  If you have been subjected to any of Ocwen’s tactics that push homeowners into default please provide this information to the aforementioned agencies.

The regulators found that Ocwen manipulates escrow accounts to create defaults and problems with taxes and insurance, does not respond accurately to submitted Qualified Written Requests, fails to properly post payments, revokes loan modifications without reason, and engages in other tactics designed to create loan defaults.  Now is the time to speak up about your experiences.  If homeowners damaged by Ocwen inundate the CFPB with complaints, perhaps this predatory servicing operation will be shut-down for good.

It appears that Ocwen’s business model and policies were designed to maximize the chances that a homeowner will default through processes that create confusion, disinformation and a deliberate lack of accountability by Ocwen.   Ocwen is not the only loan-servicing entity that engages in these practices, but it is the one currently in the regulatory crosshairs.  If these issues are brought to light, other loan servicers may be forced to change their business practices or suffer the same fate.

To file a complaint with the CFPB do so here.

To file a complaint with a state member, please do so here or find your state contact below:

AK – Alaska
Ms. Patrice Walsh
State of Alaska Department Commerce, Community & Economic Development
Chief Examiner

Phone Number:

907-269-5496

Fax:

907-269-8146
AL – Alabama
Mr. Scott Corscadden
Alabama State Banking Department
Supervisor, Bureau of Loans

Phone Number:

334-242-3452

Fax:

334-353-5961
AR – Arkansas
Ryan Drake
Arkansas Securities Department
Examiner Supervisor

Phone Number:

501-324-8688

Fax:

501-683-5894
AZ – Arizona
Mr. Robert D. Charlton
Arizona Department of Financial Institutions
Superintendent

Phone Number:

602-771-2772

Fax:

CA – BRE
Mr. Jeffrey Mason
State of California Bureau of Real Estate
Chief Deputy Commissioner

Phone Number:

916-263-8728

Fax:

916-263-8943
CA – DBO
Mr. Victor Wells
California Department of Business Oversight
Deputy Commissioner

Phone Number:

213-576-7609

Fax:

213-576-7178
CO – DORA
Ms. Marcia Waters
Department of Regulatory Agencies – Division of Real Estate
Department of Regulatory Agencies – Division of Real Estate

Phone Number:

303-894-2422

Fax:

CT – Connecticut
Mr. Carmine Costa
Connecticut Department of Banking
Director, Consumer Credit Division

Phone Number:

860-240-8207

Fax:

860-240-8159
DC – District of Columbia
Mr. Christopher Weaver, Esq
Department of Insurance, Securities and Banking
Associate Commissioner of Banking

Phone Number:

202-442-7774

Fax:

202-535-1196
DE – Delaware
E. Quinn Miller
Office of the State Bank Commissioner
Investigative Supervisor

Phone Number:

302-744-2116

Fax:

302-739-2356
FL – Florida
Mr. Andy Grosmaire
Florida Office of Financial Regulation
Bureau Chief

Phone Number:

850-410-9848

Fax:

850-410-9914
GA – Georgia
Mr. Rod Carnes
Georgia Department of Banking and Finance
Deputy Commissioner, Non-Depository Financial Institutions Div.

Phone Number:

770-986-1371

Fax:

770-986-1029
HI – Hawaii
Ms. Iris Ikeda
Division of Financial Institutions
Commissioner of Financial Institutions

Phone Number:

808-586-2820

Fax:

808-586-2818
IA – Iowa
Mr. Rodney E. Reed
Iowa Division of Banking
Finance Bureau Chief

Phone Number:

515-281-4014

Fax:

515-281-4862
ID – Idaho
Mr. Mike Larsen
Idaho Department of Finance
Consumer Finance Bureau Chief

Phone Number:

208-332-8060

Fax:

208-332-8096
IL – Illinois
Mr. Alan Anderson
Illinois Dept. of Financial & Professional Regulation, Div of Banking
Senior Counsel of Mortgage Banking Regulation

Phone Number:

312-793-1419

Fax:

312-814-2238
IN – DFI
Ryan Black
Department of Financial Institutions
Deputy Director

Phone Number:

317-232-5850

Fax:

317-232-7655
IN – Sec. of State, Securities Div.
Mr. Alex Glass
Secretary of State, Securities Division
Securities Commissioner

Phone Number:

317-232-6681

Fax:

317-232-3675
KS – Kansas
Ms. Jennifer Cook
Kansas Office of State Bank Commissioner
Deputy Commissioner – Consumer and Mortgage Lending

Phone Number:

785-296-2266 x209

Fax:

785-296-0168
KY – Kentucky
Ms. Tammy Scruggs
Kentucky Department of Financial Institutions
Division Director, Non-Depository Institutions

Phone Number:

502-782-9086

Fax:

502-573-0184
LA – Louisiana
Mr. Darin Domingue
Louisiana Office of Financial Institutions
Chief Examiner

Phone Number:

225-922-2596

Fax:

225-925-4524
MA – Massachusetts
Ms. Cindy Begin
Massachusetts Division of Banks
Chief Risk Officer

Phone Number:

617-956-1523

Fax:

MD – Maryland
Mr. Clifford Charland
Maryland Commissioner of Financial Regulation
Director of Mortgage Examination Process

Phone Number:

410-230-6167

Fax:

ME – Maine
Mr. Terry Fancy
Maine Bureau of Consumer Credit Protection
Principal Consumer Credit Examiner

Phone Number:

207-624-8685

Fax:

207-582-7699
MI – Michigan
Mr. Kirt L. Gundry
Michigan Department of Insurance and Financial Services
Director, Mortgage Examination & Investigation Section

Phone Number:

517-284-8602

Fax:

517-284-8850
MN – Minnesota
Sarah Butler
Minnesota Department of Commerce
Supervisor, Non-depository Institutions

Phone Number:

651-539-1720

Fax:

651-368-0449
MO – Missouri
Mr. Mick Campbell
Missouri Division of Finance
Supervisor of Mortgage Licensing

Phone Number:

573-751-4243

Fax:

573-751-9192
MS – Mississippi
Ms. Traci McCain
Mississippi Department of Banking and Consumer Finance
Director, Mortgage Division

Phone Number:

601-321-6901

Fax:

601-321-6933
MT – Montana
Chris Romano
Montana Division of Banking and Financial Institutions
Non-Depository Bureau Chief

Phone Number:

(406) 841-2928

Fax:

(406)841-2930
NC – North Carolina
Ms. Molly Sheehan
North Carolina Office of the Commissioner of Banks
Deputy Commissioner of Banks/Non-Depository Entities

Phone Number:

919-715-6938

Fax:

919-733-2978
ND – North Dakota
Mr. Bob Entringer
North Dakota Department of Financial Institutions
Commissioner

Phone Number:

701-328-9933

Fax:

701-328-0290
NE – Nebraska
Ms. Jean Angell
Nebraska Department of Banking and Finance
Review Examiner

Phone Number:

402-471-2171

Fax:

402-471-3062
NH – New Hampshire
Ms. Raeleen Schutte
New Hampshire Banking Department
Director of Consumer Credit

Phone Number:

603-271-3561

Fax:

603-271-0750
NJ – New Jersey
Mr. Thomas M. Hunt
New Jersey Department of Banking and Insurance
Assistant Division Director

Phone Number:

609-292-7659 x50223

Fax:

609-292-3144
NM – New Mexico
Mr. Joe Cruz
New Mexico Financial Institutions Division
Industry Manager

Phone Number:

505-476-4519

Fax:

505-476-4670
NV – Nevada
Mr. James Westrin
Nevada Division of Mortgage Lending
Commissioner

Phone Number:

702-486-0789

Fax:

702-486-0785
NY – New York
Ms. Rholda Ricketts
New York Department of Financial Services
Deputy Superintendent

Phone Number:

212-709-5540

Fax:

212-709-5555
OH – Ohio
Zachary Luck
Ohio Division of Financial Institutions
Deputy Superintendent for Consumer Finance

Phone Number:

614-644-7517

Fax:

614-222-3554
OK – Oklahoma
Mr. Scott Lesher
Department of Consumer Credit
Administrator

Phone Number:

405-521-3653

Fax:

405-521-6740
OR – Oregon
Kirsten Anderson
Oregon Department of Consumer and Business Services
Administrator

Phone Number:

503-947-7478

Fax:

503-947-7862
PA – Pennsylvania
Mr. Robert Knaub
PA Department of Banking and Securities
Director for Non-Depository Licensing

Phone Number:

717-787-3717

Fax:

SC – Board of Fin Inst.
Mr. Jim Copeland
SC Board of Financial Institutions – Consumer Fin. Div.
Assistant Commissioner

Phone Number:

803-734-2020

Fax:

803-734-2025
SC – Dept. of Cons Affairs
Ms. Carri Grube Lybarker
South Carolina Department of Consumer Affairs
Administrator

Phone Number:

803-734-4233

Fax:

803-734-4060
SD – South Dakota
Ms. Jean Blow
South Dakota Division of Banking
Policy Analyst

Phone Number:

605-773-3422

Fax:

866-326-7504
TN – Tennessee
Mr. Mike Igney
Tennessee Department of Financial Institutions
Assistant Commissioner / Compliance Division

Phone Number:

615-253-7794

Fax:

615-741-2883
TX – OCCC
Ms. Leslie L. Pettijohn
Texas Office of Consumer Credit Commissioner
Consumer Credit Commissioner

Phone Number:

512-936-7640

Fax:

512-936-7610
TX – SML
Ms. Caroline C. Jones
Texas Department of Savings and Mortgage Lending
Commissioner

Phone Number:

512-475-1038

Fax:

512-475-1505
UT – Utah
Mr. Jonathan C. Stewart
Utah Division of Real Estate
Director

Phone Number:

801-530-6744

Fax:

801-526-4387
UT – Utah
Ms. Eva Rees
Utah Department of Financial Institutions
Supervisor

Phone Number:

801-538-8834

Fax:

801-538-8894
VA – Virginia
Ms. Susan E. Hancock
Virginia State Corporation Commission
Deputy Commissioner

Phone Number:

804-371-9701

Fax:

804-371-9416
VT – Vermont
Ms. Sue Clark
Vermont Department of Financial Regulation
Regulatory and Consumer Affairs Director

Phone Number:

802-828-4878

Fax:

802-828-1477
WA – Washington
Mr. Charles Clark
Washington Department of Financial Institutions
Acting Deputy Director and Director of Consumer Services

Phone Number:

360-902-0511

Fax:

360-596-3866
WI – Wisconsin
Cheryll Olson-Collins
Wisconsin Department of Financial Institutions
Administrator, Banking Division

Phone Number:

608-267-1707

Fax:

608-267-6889
WV – West Virginia
Ms. Tracy Hudson
West Virginia Division of Financial Institutions
Director of Nondepository Institutions

Phone Number:

304-558-2294

Fax:

304-558-0442
WY – Wyoming
Mr. Joe Mulberry
Wyoming Division of Banking
Deputy Commissioner

Phone Number:

307-777-7797

Fax:

307-777-3555

CFPB Lawsuit: Ocwen fails Borrowers at every state of Mortgage Servicing Process

By K.K. MacKinstry, LendingLies

CFPB claims “widespread errors, shortcuts, runarounds cost borrowers money, homes”

Ocwen is in its death throes. Not only did 20 state banking regulators issue cease-and-desist orders but the Consumer Financial Protection Bureau also took action citing Ocwen Financial for “failing borrowers at every stage of the mortgage servicing process.”

Ocwen Financial engages in predatory servicing.

It is obvious by the allegations set forth by the CFPB lawsuit that Ocwen’s business model is not to service mortgage loans but instead to implement predatory practices that ensure defaults occur.  If Ocwen can successfully steer a homeowner into foreclosure, they receive an absolute financial windfall.  Ocwen’s reign of terror may finally be coming to an end.

According to the CFPB lawsuit, they allege that Ocwen cost borrower’s money and some of them their homes, with its history of “widespread errors, shortcuts, and runarounds.”

The CFPB states in the suit that Ocwen “botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

The CFPB says Ocwen, “illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.”

What the CFPB failed to investigate is that Ocwen routinely robosigns notes and assignments and is unable to provide evidence of a creditor.  The CFPB is looking at the surface issues but unfortunately is not concerned about Ocwen’s deeper fraudulent practices

The CFPB uncovered “substantial evidence that Ocwen has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.”   Ocwen was aware that a CFPB investigation into its servicing practices was likely and set aside $12.5 million to settle with the bureau. Considering they are making huge profits from wrongful servicing and foreclosing on homes it doesn’t own- a mere $12.5 million is a pathetic penalty by any standard.

In October of 2016 Ocwen revealed that they were under investigation and it appears that Ocwen’s negotiations with the bureau were unsuccessful.

The CFPB release states that Ocwen serviced almost 1.4 million loans with an aggregate unpaid principal balance of $209 billion, at the end of 2016.  Servicing violations, include (from the CFPB report):

  • Servicing loans using inaccurate information: Ocwen uses a proprietary loan management system called REALServicing to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information.  Ocwen is accused of loading inaccurate and incomplete information into its REALServicing system. Even when data was deemed accurate (yeah- right), REALServicing generated errors because of system failures and deficient programming. To manage this issue, Ocwen attempted to implement manual workarounds, but they often failed to correct inaccuracies and produced additional errors. Ocwen then used this faulty information to service borrowers’ loans. In 2014, Ocwen’s head of servicing described its system as “ridiculous” and a “train wreck.”
  • Illegally Home Foreclosures: Ocwen brags about its superior ability to service and modify loans for customers. The investigation found that Ocwen has failed to implement mandated foreclosure protections. The Bureau alleges that Ocwen has wrongfully initiated foreclosure proceedings on at least 1,000 people, and has wrongfully held foreclosure sales (Livinglies readers know the numbers are likely triple this number or more). Ocwen dual-tracked customers and initiated foreclosure proceedings before completing a review of borrowers’ loan modification applications. Ocwen also repeatedly asked borrowers to submit additional information with a 30-day deadline, but would then foreclose on the borrowers before the deadline. Ocwen has also foreclosed on borrowers who were compliant with their obligations under a loan modification agreement.
  • Failure to post borrowers’ payments: Ocwen reportedly failed to appropriately credit payments made by some borrowers resulting in inaccurate account information. Ocwen also failed to send borrowers accurate periodic statements detailing the amount due, how payments were applied, total payments received, and other information.  Ocwen also failed to correct billing and payment errors.  It is well known that Ocwen does not respond to Qualified Written Requests or provide the information requested as a routine policy.
  • Botched escrow accounts: Ocwen manages escrow accounts to pay insurance and taxes for over 75% of the loans it services. Ocwen has allegedly botched basic tasks in managing these borrower accounts causing huge headaches for customers.  Ocwen has allegedly failed to conduct escrow analyses and sent some borrowers’ escrow statements late or not at all and blames it on computer issues.  Ocwen failed to properly account for and apply payments by borrowers to address escrow shortages, such as changes in the account when property taxes go up. This resulted in tax and insurance issues.

 

  • Hazard insurance issues: Ocwen failed to administer escrow account for customers. A servicer is obligated to make timely insurance and/or tax payments on behalf of the borrower if contracted to do so. Ocwen failed to make timely insurance payments to pay for borrowers’ home insurance premiums. Ocwen’s failures led to the lapse of homeowners’ insurance coverage for more than 10,000 borrowers. Some borrowers were pushed into force-placed insurance.
  • Private mortgage insurance failures: Ocwen failed to cancel borrowers’ private mortgage insurance, or PMI, in a timely way, causing consumers to overpay.  Borrowers must purchase PMI when they obtain a mortgage with less than 20% down, or when they refinance their mortgage with less than 20% equity in their property. Servicers must end a borrower’s requirement to pay PMI when the principal balance of the mortgage reaches 78% of the property’s original value. Since 2014, Ocwen has failed to end borrowers’ PMI on time after learning information in its REALServicing system was unreliable or missing altogether. Ocwen ultimately overcharged borrowers about $1.2 million for PMI premiums, and refunded this money only after the fact.
  • Deceptively charged homeowners for add-on products:  Ocwen pulled a Wells Fargo and enrolled some customers in add-on products through deceptive solicitations and without their consent. Ocwen then billed and collected payments from these consumers without their consent.
  • Heirs seeking foreclosure alternatives were denied assistance: Ocwen mishandled accounts for heirs or successors to deceased borrowers. These people included widows, children, and other relatives. Ocwen failed to properly recognize individuals as heirs, and thereby denied assistance to help these individuals avoid foreclosure. In some cases, Ocwen foreclosed on individuals who may have been eligible to save these homes through loan modifications or other loss mitigation options. This is the epitome of engineering a default so Ocwen could illegally steal a home.
  • Failed to adequately investigate and respond to borrower complaints: Servicer are required to investigate errors and correct the error identified by the borrower, called a notice of error. Since 2014, Ocwen has allegedly routinely failed to properly acknowledge and investigate complaints, or make necessary corrections.  In April 2015 Ocwen failed to address the difficulty its call center had in recognizing and escalating complaints. Under its new policy, borrowers must complain at least five times in nine days before Ocwen automatically escalates their complaint to be resolved. Since April 2015, Ocwen has received more than 580,000 notices of error and complaints from more than 300,000 different borrowers.
  • Provided incomplete and inaccurate information to new servicers: Ocwen failed to include complete and accurate borrower information when it sold servicing rights for thousands of loans to new mortgage servicers. This resulted the new servicers’ efforts to comply with laws and investor guidelines. It is likely that not only does Ocwen have incomplete payment histories but cannot produce the original notes or assignments without resorting to fraudulent means to recreate them.

The CFPB accuses Ocwen of failing to “remediate borrowers for the harm it has caused, including the problems it has created for struggling borrowers who were in default on their loans or who had filed for bankruptcy.”  The CFPB need only contact Livinglies and we will be happy to provide information about the challenges our clients have faced while trying to obtain basic information about their loans including who the real creditor is.  In some cases it appears that Ocwen had no idea who they were servicing the loan for.

CFPB Director Richard Cordray summarized Ocwen’s alleged failings.  He wrote, “Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” Cordray continued, “Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.”

Ocwen denying any liability and released a lengthy statement in response to the CFPB’s allegations. To read the statement click here.  The market responded with a drastic loss of over 50% per share.

 

Miami Judge: No Transaction=Unclean Hands. Judgment for Homeowner with Sanctions.

It’s time to sit up and take notice. Judges are turning the corner and getting pretty angry about what passed before as evidence. In April this order seemed like a shot in the dark. But now, we are seeing more and more judges actually study the chain of alleged transactions relied upon those who seek forced sale of a residence. The motivation of those seeking foreclosure is gradually being revealed this year. Not surprisingly they are not in the least bit interested in the property or the loan. They want a foreclosure judgment because THAT is what has value for them — getting the judge to unwittingly ratify all the preceding illegal acts and frauds perpetrated on the borrower and the courts. Once again our friends at Ocwen are named as the culprits, but this judge goes further when she says

‘This Court finds the AOM [assignment of mortgage] created in 2012 does not document a transaction that occurred in 2005, as Plaintiff suggests. The transaction described in the AOM never legally occurred.There was never a transaction between MERS and/or Freemont Investment and Loan that sold Defendant’s loan directly to the Trust. Not in 2012, not in 2005, not ever.’ (e.s.)

see ocwen-order

HSBC v Buset, Case # 12-38811 CA 01 Decided 4/26/16 Hon Beatrice Butchko

For about 10 years now I have endured taunts from people representing the banks or themselves citing case after case saying I was wrong in my legal analysis. I persisted because I knew I was right. The reality of a transaction is far more important than the self serving paperwork that parties use to justify their illegal actions  — the last decade notwithstanding. If there was no purchase of the loan then the assignee received nothing.

But more important than that is something that Judge Butchko seemed to pick up on. She asks the simple question: why would Ocwen violate a mandatory discovery order that would prove the Plaintiff’s case? Instead they tried to plow through without the reality of a single transaction in which a loan was made, purchased or sold.

If the alleged loan was not sold then why were there any papers showing a transfer of the “loan.” And if each party in the chain was paying nothing to the party before them, why was the assignor signing an assignment without getting paid for it. And if that is true for all the assignments and endorsements then was the originator a lender? If the originator received nothing in a purchase transaction for the alleged loan, the only logical conclusion is that there was no loan by the originator and there might have been no loan at all.

With that conclusion why would a party with no money in the “game” be suing for foreclosure? The answer must be completely separate from the loan because that is obviously of no consequence to those participating parties that were getting fees for executing documents that pretended that there was a purchase and sale of the debt. The answer is that foreclosure is the ONLY way they could cover their tracks in the false sales of mortgage bonds issued by an empty non-operating trust. If you look at decisions like this and thousands of other cases the conclusion is inescapable — a foreclosure judgment is the first and only legal document is the entire chain.

Here are some quotes

The Court takes judicial notice that on July 25, 2008, Freemont Investment and Loan (“Freemont”) entered into a voluntary liquidation and closing which did not result in a new institution. https://www5.fdic.gov/idasp/confirmation_outside.asp?inCert1=25653. As such, the status of MERS as nominee for Freemont ended when Freemont closed on July 25, 2008, which renders the AOM created in 2012 void ab initio.

This endorsement is contrary to the unequivocal terms of the PSA, in evidence over Plaintiff’s objection, which required all intervening endorsements be affixed to the face of the note because there was ample room for endorsements on the face of the note. There is also no evidence the endorsement was affixed before the originator went out of business in 2008.

The Court also finds unclean hands in Plaintiff’s failure to comply with the Court’s Discovery Order of April 27, 2015.

17. In that order, the Court overruled plaintiff’s blanket objections and found no basis for Plaintiff to object to providing any discovery under Fla. Stat. 655.059.

18. The Court then ordered Plaintiff to provide (1) the final executed documents evidencing the chain of title for the subject loan; (2) all records of any custodian related to the chain of custody of the note; and (3) all records showing how and when the specific endorsement on the promissory note was created.

The Court fails to comprehend why Plaintiff would not fully comply with the Court’s Order compelling discovery when the evidence sought by the Defendant would actually assist Plaintiff in establishing the missing link in the chain of ownership in the endorsement and assignment of mortgage.

The Court hereby enters an Order to Show Cause why Plaintiff should not be Sanctioned for violating the Court’s order on April 27, 2015, after representing that it fully complied on or before January 14, 2016.

23. Moreover, the Court hereby enters an Order to Show Cause why Plaintiff should not be sanctioned for the reasons set forth in Defendant’s Motion for Sanctions Under the Court’s Inherent Contempt Powers for Fraud Upon the Court filed on March 16, 2016.

24. Defendant is hereby ordered to conduct further discovery in support of these orders to show cause and set an evidentiary hearing on them at the Court’s earliest convenience.

Ms. Keeley testified the loan boarding process involved two steps. First, Ocwen confirmed that the categories for each column of financial data from the prior servicer matched or corresponded to the same name Ocwen used for that same column of financial data. Second, Ocwen confirmed the figures from the prior servicer transferred over such that the top figure from Litton became the bottom figure for Ocwen. The court notes that when testifying about Ocwen’s boarding process, Ms. Keeley appeared to be merely repeating a mantra or parroting what she learned the so called boarding process is without being able to give specific details regarding the procedure itself. 1 Her demeanor at trial although professional, was hesitant and lacking in confidence in this court’s estimation as the trier of fact.

To support the court’s concern regarding the lack of foundation of the so called boarded records in this case, the Court takes Judicial Notice of the Consent Order entered in the matter of Ocwen Financial Corporation, Ocwen Loan Servicing, LLC by the New York State Department of Financial Services dated December 22, 2014. This Consent Order documents Ocwen’s practice of backdating business records that it failed to fully resolve “more than a year after its initial discovery.”

1 This Court estimates that it has presided over hundreds of foreclosure bench trials since being assigned to the Civil Division in 2011. The court has accordingly heard hundreds of bank witnesses testify regarding their company’s boarding process and has accepted thousands of documents into evidence pursuant to same. The boarding process and training of personnel regarding the boarding of documents varies greatly from one institution to another.

the Court noted that the first two default letters in the inch thick stack which Plaintiff sought to admit into evidence were inexplicably dated a week apart and had a $1,900 difference in the amount required to cure the default.

the admission of the default letters mailed by an outside entity not testifying in court creates a double hearsay problem as there is no evidence of a boarding process of that third party vendor’s mailing practices and procedures. Nor did the Ocwen representative testify that she had received training regarding the procedure used by the third party vendor in mailing the default letters.

Both the endorsement and the assignment omit the Depositor, Freemont Mortgage Securities Corporation, from the transaction which constitutes a fatal break in the chain of title.

The Court gives great weight as the trier of fact to the testimony of Defendant’s

expert witness, Kathleen Cully. Ms. Cully is a Yale Law School graduate that worked her entire career in structured finance transactions since 1985. She was extremely well versed in the Uniform Commercial Code. Among many other tasks and accomplishments, Ms. Cully testified that she led the Citigroup team that created the first pooling and servicing agreement ever. She led Citigroup’s Global Securitization strategy. The Court finds Ms. Cully eminently qualified as an expert witness in the area of securitized transactions and their interplay with the Model Uniform Commercial Code.

The Court applies Ms. Cully’s reasoned analysis as it relates to the note and mortgage for the subject loan and to Article 3 of Florida’s Uniform Commercial Code. However, it is axiomatic that all promissory notes are not automatically negotiable instruments.

This Court finds that the Note is non-negotiable as the amounts payable under the Complaint include amounts not described in the Note and as the Note does not contain an unconditional promise to pay.

66. The promise is not unconditional because the Note is subject to and/or governed by another writing, namely the Mortgage. Moreover, rights or obligations with respect to the Note itself—as opposed to the collateral, prepayment or acceleration—are stated in another writing, namely the Mortgage.

The Court grants Defendants’ Motion for Involuntary Dismissal and enters judgment in favor of the Defendants who shall go forth without day.

83. The Court reserves jurisdiction to award prevailing party attorney’s fees and to impose sanctions against Plaintiff under the inherent contempt powers of the court for fraud on the court, and such other orders necessary to fully adjudicate these issues.

84. Plaintiff is ordered to produce a corporate representative with most knowledge regarding its efforts to comply with the discovery order dated April 27, 2015, for deposition at the offices of Defendant’s counsel within 15 days from the entry of this order.

 

ICYMI: Ocwen given OK to move forward on 17,000 foreclosures

What happened with Metric 31?

Editor’s Note: This “go-ahead” may be why many LivingLies readers have recently received random notifications from Ocwen that they didn’t qualify for a loan modification when they never applied for one.  In the past several months, borrowers have informed LendingLies that they received random notices from Ocwen that appeared to be mailed in error.  Ocwen is likely trying to cover up any possible issues with Hamp mods even if the homeowner did not apply for a mod.  Therefore, Ocwen has been given the green flag to pursue foreclosures in which they have no documentation proving they own the loan.

Ocwen Financial got the official go-ahead from the Office of Mortgage Settlement Oversight to lift the foreclosure sale hold placed on more than 17,000 loans earlier this year after it mailed corrected loan modification denial notices to affected borrowers and provided a sufficient timeframe for the borrower to appeal the denial.

According to the most recent third and fourth quarter 2015 oversight report from Joseph Smith, monitor of the National Mortgage Settlement, “After Ocwen mailed corrected loan modification denial notices to affected borrowers in May 2016 and provided a sufficient timeframe for borrowers to appeal their denials, I permitted Ocwen to lift the foreclosure hold in July 2016.”

While the issues date back to a report released in October 2015 on the second half of 2014, Ocwen was still not yet back in compliance with one of the performance metrics it failed.

Metric 31, the metric Ocwen failed to correct, tests whether the mortgage servicer sent a loan modification denial notification to a borrower that included the reason for the denial, the factual information considered by the servicer in making its decision and a timeframe by which the borrower can provide evidence that the decision was made in error.

Smith’s office stated that Ocwen “was delayed” in implementing its Corrective Action Plan for the failure of Metric 31 because of “difficulties in resolving the technical issues that led to the original fail.”

And because of those issues, Ocwen had to place 17,300 loans that “could have been affected” by this issue on foreclosure hold.

It’s important to note that when first reported back it April, the NMS stated that 17,496 were put on hold. However, the number dropped to 17,300 in the latest update due to variety of reason, the NMS explained.

Joseph Smith’s office stated that reasons could include: Ocwen may have approved a modification, a borrower may have subsequently submitted a new loan modification application, the borrower may have paid off the loan or the borrower may have appealed the denial despite the issues with the initial denial letter.

When the news came out in April, Ocwen responded to Smith’s office and the nature of the sanctions that Smith’s office placed on it, saying, “Ocwen takes borrower harm very seriously and worked with Office of Mortgage Settlement Oversight to place certain loans on a hold to ensure that no foreclosure sale would take place until OMSO reviewed and validated that all matters associated with Metric 31 were resolved.”

“These holds are not ‘frozen foreclosures’ but rather an agreement not to foreclose until OMSO reviewed and approved Ocwen’s remediation,” Ocwen continued. “Many of these loans have never been referred to foreclosure and never will be. The company has already resumed internal testing of Metric 31, and expects future OMSO reports will reflect that its concerns are resolved.”

According to Ocwen, it referred over 19,000 loans to foreclosure and completed approximately 7,000 foreclosures in the first quarter of 2016, while completing more than 16,600 loan modifications.

Now that the hold is lifted, Ocwen commented on new report saying, “Ocwen is committed to taking all necessary actions to be complaint with the National Mortgage Settlement. Ocwen has made significant investments in our risk and compliance management infrastructure to ensure that we are compliant with all rules and regulations related to our business. We will continue to work closely with the Monitor and look forward to the next report.”

Ocwen also noted that Metric 31 Correction Action Plan, which was discussed in the previous Monitor’s report, has been satisfactorily completed and the associated foreclosure holds have been lifted.

Here’s a chart from the NMS that gives an overview of Metric 31

%d bloggers like this: