Tag Archives: Ocwen

Ocwen Caught Backdating Mortgage Letters

trap,  catchAccording to a recent review of Ocwen Financial Corporation, a major mortgage servicer, by the New York Department of Financial Services (DFS), Ocwen may have backdated thousands of letters it sent to borrowers who were trying to save their homes from foreclosure.

What Types of Letters Did Ocwen Backdate?

The DFS review into Ocwen’s servicing practices revealed that the company sent letters to borrowers denying their loan modification requests and giving them 30 days to appeal; however, in many cases, those letters were backdated by more than 30 days. This means the deadline to appeal had passed by the time the homeowners received the letters. (Learn more about government loan modification programs.)

In other cases, Ocwen sent letters to borrowers who were behind in payments giving them a deadline to cure the default and avoid foreclosure — but the deadline was months before the borrower actually received the letter.

How Many Borrowers Received Backdated Letters?

The DFS indicates that the backdating issue goes back to 2012, though the New York Post has reported that the problem may have started as early as 2010. As of now, there’s really no way to know how many backdated letters Ocwen has sent (or continues to send). Ocwen is the largest non-bank mortgage servicer in the country and currently services over two million mortgage loans, so it’s quite possible that thousands of improperly backdated letters have gone out. 

Ocwen’s Track Record of Servicing Errors and Abuses

This isn’t the first time that Ocwen’s mortgage servicing procedures have hurt borrowers. A previous investigation into Ocwen’s servicing activities revealed extensive misconduct, including robosigning and charging improper fees, among other errors and abuses in their mortgage servicing processes.

As a result, in December 2013, Ocwen reached a settlement with 49 state attorneys general, the District of Columbia, and the Consumer Financial Protection Bureau that, among other things, required Ocwen to comply with certain standards for servicing loans and to provide $125 million to eligible borrowers. (Learn more in Nolo’s article Foreclosure Relief for Homeowners With Ocwen Mortgages.)

What the Backdating Scandal Means for Harmed Borrowers

It looks very likely that Ocwen will subject to yet another settlement and have to pay millions of additional dollars in restitution payments to borrowers who were harmed by backdated letters.

Also, if you have a mortgage loan that Ocwen services and you applied for a loan modification, but were denied, review your denial letter closely. If the dates don’t make sense, you might want to consult with an attorney who can help you enforce your appeal rights.

You should also speak to an attorney if you’ve received a letter from Ocwen giving you a deadline to cure a mortgage default and avoid a foreclosure, but that deadline had already passed. If that letter (the “breach” letter) is invalid, any subsequent foreclosure steps may also be invalid.

Posted by guest blogger Amy Loftsgordon

Mortgage Service Companies Blasted by Regulators and Housing Advocates

Customer service satisfaction surveyThe big banks have earned a pretty bad reputation over the last decade when it comes to servicing mortgages and, in particular, dealing with homeowners facing foreclosure or struggling to make mortgage payments. So regulators and housing lawyers were hopeful when some of the biggest banks began relying more on mortgage servicing companies to handle accounts. Unfortunately, according to a recent New York Times article, mortgage services are no improvement over the banks when it comes to serious blunders and terrible customer service. In fact, some say they are worse.

What Are Mortgage Servicers?

Your home loan holder (for example, the bank you took out your loan from) can transfer the servicing rights to your loan to a specialty mortgage servicing company. The bank pays the company to service your loan, which includes collecting mortgage payments and forwarding them to the loan holder, setting aside taxes and homeowner’s insurance (if you have an escrow account), and generally managing your account. Loan servicers can also negotiate foreclosure avoidance workouts, handle loan modification applications, and supervise foreclosure procedures.

While mortgage services are not new to the mortgage scene, in the last few years banks have been transferring servicing duties to these companies in record numbers.  Today, specialty mortgage servicers (the two biggest are Ocwen Financial and Nationstar) handle six times more mortgage accounts than they did in 2010.

Complaints About Specialty Mortgage Servicing Companies

According to the New York Times, the number of complaints about mortgage servicing companies has surged in recent years.  Here are just a few of the gripes against mortgage servicers (for a more detailed list, see Common Mortgage Servicer Violations in Loan Modifications).

  • The companies often fail to appoint a single point of contact and instead give homeowners the runaround when they are trying to get a loan modification or negotiate a workout.
  • Companies repeatedly ask homeowners for the same documents during loan modifications, so that homeowners get stuck on an endless document production treadmill without any resolution of their application.
  • Companies lose loan modification files when transferring the loan to another company.

A recent settlement highlights some of the specific complaints against Ocwen. According to the investigation that ended in the settlement, in the past few years Ocwen:

  • used robosigners (employees signed foreclosure documents but had no knowledge about the information in the documents)
  • charged improper fees
  • provided false or misleading reasons for denying loan modifications, and
  • dropped the ball on loan modification applications that were processed by previous servicers. (To learn more about the investigation and settlement, see Foreclosure Relief for Homeowners With Ocwen Mortgages.)

Worse Than the Banks?

According to regulators, customer service is sorely lacking with the mortgage servicing companies, even more so than with the banks.

What Can You Do?

If your mortgage servicer is stalling, giving you the runaround, or has made errors in your account, take action. Here are some things you can do.

Consult with a foreclosure attorney. You can contact a foreclosure or debt attorney to step in and help.

Submit a complaint to the Consumer Financial Protection Bureau. You can submit an online complaint with the CFPB.  The CFPB won’t represent you, but it does gather complaints so that it can track trends and take action where necessary. It will also forward your complaint to the mortgage servicer – but it won’t stop the foreclosure.

Contact Ocwen. If your loan is with Ocwen, you might be able to get assistance under the terms of the settlement agreement.  Call 800-337-6695 or email ConsumerRelief@Ocwen.com.