Ocwen Foreclosures Halted for Settlement Compliance Failure

Ocwen Financial holds the keys to some 17,500 defaulted home mortgage loans – and can’t continue to foreclose on a single one. stop

That is true at least for the time being, after the National Mortgage Settlement monitor announced the company is barred from foreclosure action after falling short of the required performance metrics.

The monitor announced the mortgage servicer failed on a key metric that requires the mortgage servicer to send a loan modification denial notification to the borrower. This notice needs to denote why the modification was denied, as well as the facts that weighed into this ruling by the servicer. It also must indicate a timeline in which the defaulted homeowner can offer evidence the decision was a mistake.

The National Mortgage Settlement office first announced the company wasn’t in compliance with this metric back in October. However, it’s now been seven months, and the company still hasn’t remedied the problem. That led the office to bring all of Ocwen’s foreclosures to a screeching halt. 

Apparently, there were “technical issues” that resulted in the original compliance failure, and the settlement office said this resulted in delays implementing the “Corrective Action Plan” that was handed down to remedy the issue.

After identifying 17,500 loans that might have been affected by this foreclosure issue, the office ordered the company to halt any further progress on those foreclosures for the time being. The office said that Ocwen had made some progress in correcting other non-compliance issues, but this was still an issue.

Joseph Smith, the official monitor of the NMS, said borrowers are entitled to the receipt of correct information and the opportunity for a fair appeal before they risk losing their homes. Until they have that, Smith said, Ocwen can’t be allowed to proceed.

Still, this pause may not last long. Ocwen reportedly submitted a corrective action plan, which has already been implemented. Smith said if his office determines the measures are in place and the borrowers have all the protections to which they are entitled, Ocwen may be allowed to resume foreclosure actions by June. If that happens, that would mean just a two-month delay for some borrowers.

Since the foreclosure crisis and in the wake of the National Mortgage Settlement, Ocwen has (at the government’s behest) provided some $2 billion to 23,000 borrowers for consumer relief purposes. That fulfills its consumer relief obligation under the settlement. But let’s remember: Ocwen didn’t do this out of the goodness of executives’ hearts. It was done because it was ordered by the U.S. government after extensive evidence showed the company’s practices resulted in thousands of unfair foreclosures.

Other corrective actions that the company was required to take included:

  • Timely, accurate and complete pre-foreclosure notification letters to borrowers;
  • Compliance with propriety of certain fees passed on to borrowers in default;
  • Timely response to borrowers for information that is missing or incomplete;
  • Notifying borrowers within 30 days of any missing documents necessary for a borrower-requested short sale.

The company has pledged to continue working with borrowers on loan modification and principle reduction programs. Our Miami foreclosure defense lawyers know this does not mean they are on your side in these proceedings.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley 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 at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

Additional Resources:

Ocwen foreclosures frozen after National Mortgage Settlement compliance failure, April 28,2016, By Ben Lane, www.housingwire.com

More Blog Entries:

Naked Capitalism: Robo-Signing an Ongoing Plague, March 17, 2016, Miami Foreclosure Lawyer Blog