CFPB Sues Mortgage Servicer Ocwen for Unlawful Practices

The West Palm Beach, Florida-based Ocwen Financial Corp., one of the country’s largest consumer mortgage payment processors, has been sued by the Consumer Financial Protection Bureau (CFPB) and is facing a cease-and-desist order from a multistate committee which will shut down its operations in a number of states.As of the beginning of 2017, Ocwen serviced nearly 1.4 million loans in all fifty states and D.C. worth about $209 billion in aggregate unpaid principal balances. Ocwen and its subsidiaries are accused by the CFPB of “failing borrowers at every stage of the mortgage servicing process,” and the bureau also claims that “widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes.”The charges also include wrongfully initiating foreclosure proceedings for at least 1,000 people, failing to properly allocate payments by borrowers, and submitting incomplete and inaccurate information into its system. The OFC invoked the new presidency in its response to the suit, claiming “Today’s suit can only be viewed as a politically-motivated attempt by the CFPB to grab headlines in reaction to the change of administration and recent scrutiny of the CFPB’s activities.”The cease-and-desist order against OFC comes from a “Multi-State Mortgage Committee” consisting of state regulators from Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington, and the order forces OFC to “immediately stop acquiring new mortgage servicing rights or acquiring or originating new mortgages until it meets requirements for information from state regulators on an investigation into its financial matters.” The committee alleges several violations of both state and federal law, as well as “ongoing unlicensed activity” in certain states.“Ocwen has consistently failed to correct deficient business practices that cause harm to borrowers,” says Ray Grace, Commissioner of Banks in North Carolina. “We cannot allow this to continue.”