Borrowers with mortgage loans serviced by Ocwen Financial Corp. may never have had a chance when it came to avoiding foreclosures.
An investigation by the New York's Department of Financial Services revealed the company engaged in a practice of falsely backdating foreclosure warnings and letters of denied loan modifications for mortgages. Borrowers who defaulted received warning letters of the default months after deadlines for avoiding a foreclosure had passed. By the time borrowers had any notice of a problem, their options to appeal or take other action were virtually non-existent.
This did not happen just once or twice or even a handful of times. Investigators found evidence of hundreds of thousands of backdated letters.
Ocwen's reaction? According to state regulators, indifference. The official explanation for the problems is "software errors" in the correspondence systems.