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.
Our Miami foreclosure defense lawyers want to stress to those who have defaulted on loans serviced by Ocwen that you will need an experienced legal professional to minimize the impact. As this recent investigation shows, this is not a company interested in negotiating fair modifications for borrowers or in helping people save their homes.
All of this comes not 12 months after the company settled with federal regulators to reduce borrower loan balances by more than $2 billion after being implicated in a host of widespread foreclosure abuses in 49 states, including Florida.
What this investigation reveals is that we are still up against the same kind of abusive foreclosure practices that led us barreling through the bubble in 2008. Seven years have passed, and Ocwen has decided the rules are not applicable to it. In fact, if the new allegations are true, it would put Ocwen squarely in violation of the deal it signed with the Consumer Financial Protection Bureau and most state attorneys general. This has prompted several state attorneys general – including Pam Bondi of Florida, to launch investigations into the alleged breaches.
The backdating of loan modification denial notices and foreclosure notices goes back to at least 2012 and likely continued through this year.
The New York agency that investigated the matter said this revelation raises serious questions about whether this company actually has the ability to perform its core function of mortgage servicing.
It’s possible the CFPB could seek penalties for any violations, per the agreement reached in Consumer Financial Protection Bureau v. Ocwen Financial Corp. before the U.S. District Court in D.C.
To put into perspective the scope of the problem, Ocwen, which specializes in the service of high-risk mortgages, managed $106 billion in subprime mortgages this year.
The New York investigation first started after a flood of allegations of force-placed insurance, where struggling homeowners were overcharged for home insurance the company forced them to buy because they failed to maintain their voluntary homeowner insurance. If a homeowner doesn’t pay for the new insurance, that gives the servicer the right to foreclose on the property. The firm was allegedly able to push thousands closer to foreclosure by charging them sky-high premiums for force-placed insurance.
Regulators then discovered the back-dating issue. While the company blames technical glitches, internal documents reveal a worker raised questions about the practice more than a year before Ocwen launched an internal investigation into the matter.
Meanwhile, borrowers suffered “significant harm,” according to regulators.
If you’re battling foreclosure in Miami or the surrounding areas contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.
Top Mortgage Firm Accused of Abuses, Oct. 21, 2014, By Alex Veiga, Associated Press
More Blog Entries:
CFPB Cracks Down on Bad Banking Practices, Oct. 15, 2014, Miami Foreclosure Defense Attorney Blog