government, and vow to go and sin no more. Time has passed, and today
Ocwen is the first to be prosecuted by the CFPB for their continuing
unlawful activity, now affecting thousands of Americans who used to
have houses but now live under bridges.
These are a few of my favorite charges-
42. As of 2014, Ocwen had also failed to verify whether the prior servicers’
corporate advances or fees for servicing-related expenses—such as
attorneys’ fees, property inspection fees, property preservation fees, force-placed
insurance charges, and foreclosure-related expenses—were valid and actually owed by
borrowers. In many instances, Ocwen has charged borrowers for these charges and fees,
even though neither Ocwen nor the prior servicer had invoices or other documents to
support these charges and fees, and even though Ocwen was receiving disputes from borrowers
claiming that these charges or fees were not owed.
59. First, with respect to Ocwen’s data management, REALServicing requires
the use of more than 10,000 comment codes and flags. Yet, Ocwen lacks
a complete data dictionary defining its comment codes, flags, and data fields. As a
result, Ocwen personnel do not share a common understanding of what these comment
codes or flags mean or how Ocwen personnel should use them.
69. Ocwen’s use of inaccurate and incomplete information resulting from its
boarding of inaccurate and incomplete information into REALServicing,
REALServicing’s deficiencies, and Ocwen’s error-prone manual processes
has caused or is likely to have caused borrowers substantial harm, and resulted in Ocwen
communicating, orally and in writing, information to borrowers that it
knew or had a reason to know was inaccurate.
92. Ocwen’s errors in crediting borrower payments and use of inaccurate
payment information have significantly harmed borrowers. Ocwen has charged
borrowers improper late fees; reported inaccurate, negative payment
information to credit reporting agencies; subjected borrowers to collection calls
based on inaccurate information; and wrongly threatened borrowers with foreclosure. This conduct has
harmed borrowers financially and caused borrower frustration and
96. From April 2015 to April 2016 alone, Ocwen received complaints from
more than 68,000 borrowers related to its processing of payments.
Ocwen determined it made numerous errors in the following categories:
“Payments Not Applied Correctly”;
“Funds Not Applied Correctly”;
“Late and NSFFees”;
“Payment Missing –Not Applied to Account”;
“Chargeback Issue - Borrower Disputes Charged Back Item”;
“Fee Assessed Improperly”;
“Payment Not Processed Timely”;
“ACH Drafted Incorrectly (Incorrect Date, Multiple Drafts, etc.)”;
“ACH Payment – Chargeback”;
and “Incorrect Data in the Account Statement.”
120. Fifth, as a result of Ocwen’s above failures, Ocwen has communicated,
orally and in writing, inaccurate information to borrowers about escrow amounts,
reinstatement amounts, and payoff amounts. These representations are material to
borrowers managing their mortgages and are likely to mislead borrowers acting
reasonably under the circumstances,
156. Between January 2014 and mid-2015, Ocwen failed to implement policies
and procedures that were reasonably designed to meet the objective of
Ocwen properly handling accounts for successors in interest to a deceased borrower
(“successors”), particularly when successors were applying for loss mitigation
assistance. As a result, Ocwen failed to properly recognize individuals as successors, denied
loss mitigationassistance to, and, in some instances, ultimately conducted
foreclosure sales upon the loans of successors who may have been eligible for a loan modification
or other loss mitigation options.
162. For example, one potential successor complained that Ocwen had
provided her with misinformation about the requirements for receiving a loan
modification for her deceased mother-in-law’s property. According to
the potential successor, when she contacted Ocwen to inform it that her
mother-in-law had passed away and that she and her husband wanted to request loss mitigation
assistance to keep the property, Ocwen told her that she and her husband would not need
to assume the mortgage.According to the potential successor, Ocwen later informed
her—after she had made all required payments under a trial modification—that if she
wanted to receive a permanent modification, she and her husband would have to assume the
mortgage. The potential successor also complained that Ocwen had wrongfully charged
foreclosure fees to the account, even though Ocwen records showed it had placed a
foreclosure hold on the account. The potential successor complained to Ocwen, which
directed the potential successor to its foreclosure firm, to explain the foreclosure fees.
When the potential successor contacted Ocwen’s foreclosure firm about the foreclosure
fees, however, shereports that the firm told her that it had not done any work because
the foreclosure wason hold.
163. Ocwen’s errors at every loan servicing stage have made it even more
important that the company adequately investigate and respond to
borrower complaints and notices of errors. These functions can act as a “safety net” to
catch borrowers before they are further harmed by a servicer’s unlawful conduct. Here, too,
Ocwen has failed borrowers. Since April 2015, Ocwen has received more than 580,000 complaints and
written notices of error from more than 300,000 different borrowers.
And my favorite of favorites - 'Call any vegetable...call me by
name...call me five times in nine days...and maybe I will respond to
169. In April 2015, Ocwen implemented new policies and procedures to address
the difficulty its call center personnel had in recognizing and
escalating borrower complaints. These policies and procedures, however, were not
reasonably designed to handle consumer complaints. For example, instead of requiring Ocwen to
identify a complaint the first time a borrower calls in, the new policies and
procedures place the burden on the borrower to complain multiple times–at least five times
in nine days–before Ocwen will automatically escalate their complaint for
resolution to an Escalation Relationship Manager.
215. Ocwen has lacked a systematic process to track and analyze errors it learns
of through borrower complaints or NOEs to determine whether other borrowers may
have been harmed by the same errors. As a result, Ocwen has typically
only corrected errors or provided remediation to those borrowers who have complained (assuming
Ocwen recognizes the call as an actual complaint, investigates, and/or makes a
correction) or submitted an NOE, but generally has not corrected the
same or similar errors for other borrowers who did not complain.
Nice Work, CFPB!