Ocwen woes continue as yet another state sues

by Ryan Smith21 Apr 2017
Ocwen Financial is not having a good week. After more than 20 states issued enforcement orders against the servicing giant yesterday and the CFPB sued it, the company’s woes compounded yesterday as yet another federal lawsuit was filed.

Florida Attorney General Pam Bondi and Office of Financial Regulation Commissioner Drew J. Breakspear have filed a consumer-protection lawsuit against Ocwen Financial and its subsidiaries, Ocwen Loan Servicing and Ocwen Mortgage Servicing, for mortgage servicing misconduct. According to Bondi’s office, Ocwen filed illegal foreclosures, mishandled loan modifications, misapplied mortgage payments, failed to pay insurance premiums from escrow and collected excessive fees.

Ocwen has been in hot water in Florida before. In 2014, the state was a party to a $2.1 billion settlement between Ocwen and 49 states and the District of Columbia. As part of that settlement, Ocwen was supposed to address allegations of servicing misconduct – but Bondi said the company’s promises to improve were empty. 

“It is my office’s duty to protect the more than 125,000 Ocwen borrowers in Florida. Since 2014, when we first entered the multistate settlement with Ocwen, we have listened to Ocwen’s promises that they would ‘right the ship’ and resolve the improper mortgage servicing and foreclosure misconduct that has plagued it,” Bondi said. “Enough is enough. Florida’s distressed Ocwen borrowers should no longer have to endure costly servicing errors and unfair practices.”

“Despite the national settlement and numerous other lawsuits and regulatory actions brought against Ocwen throughout the nation, Ocwen allegedly violated consumer protection laws through its use of a fundamentally flawed and unreliable system of record, operational deficiencies and inadequate controls to ensure compliance and prevent errors,” the Florida Attorney General’s Office said in a statement.

According to the latest complaint, filed in federal court in West Palm Beach, Ocwen didn’t adequately perform basic mortgage servicing functions and committed “widespread errors” that caused financial harm to borrowers.  

Related stories:
Ocwen’s terrible, horrible, no-good, very bad day
Ocwen dealt crippling blow by 20 state regulators



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