Ocwen Ordered to Cease Mortgage Operations in Massachusetts
Ocwen, one of the largest mortgage servicers in the country, faces regulatory action from both the state and federal levels for “failing borrowers at every stage of the mortgage servicing process,” including mishandling mortgage accounts and botching loan modifications.
The federal Consumer Financial Protection Bureau sued Ocwen for a wide assortment of offenses. The CFPB explains:
The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes. They allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Allegedly, they also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.
Ocwen services over 1.4 million mortgages for homeowners in all 50 states. It is alleged to have engaged in “significant and systemic misconduct,” including illegal foreclosures.
In the CFPB’s lawsuit, it asks the court to enjoin Ocwen from committing further violations of consumer-protection laws, refund money to consumers, and impose civil.
But the action against them doesn’t stop there. At the state level, the Massachusetts Division of Banks, which regulates mortgage servicers, issued a Temporary Order to Cease and Desist and Order to Show Cause against Ocwen. Amazingly, the order requires them to cease all operations in Massachusetts and transfer all of its loans to new mortgage servicers. (They are permitted to continue servicing mortgages until the transfers occur.) Ocwen services almost 35,000 mortgages in Massachusetts.
Consumers should not stop making their mortgage payments. The Division of Banks explains that “consumers with mortgage loans serviced by Ocwen should continue to submit loan payments to them in normal course in accordance with their loan terms. They will continue to service these loans until an orderly transfer of the servicing is completed in accordance with the Order.”
Ocwen has responded by filing a lawsuit against Massachusetts asking for an injunction to allow it to continue its operations.
What will happen next? If they win their motion, which is unlikely, then it will be allowed to continue operations in Massachusetts. If it loses, however — which is more likely — then it will have to transfer all its mortgages to another loan servicer.
According to one report, Ocwen is already in the process of transferring loans to New Residential Corporation, another mortgage servicer.
You can read more about this at the following links:
- The CFPB’s lawsuit is here: CFPB lawsuit against Ocwen
- The CFPB’s press release is here: CFPB Sues Ocwen for Failing Borrowers Throughout Mortgage Servicing Process
- Division of Banks press release: State Regulators Issue Cease-and-Desist Orders
- Press release: Ocwen Files Motions for Restraining Orders and Injunctions Against Illinois and Massachusetts Mortgage Regulators
Culik Law is a Massachusetts Consumer Protection law firm. We have handled numerous cases against mortgage servicers like Ocwen, and in many cases obtained loan modifications and filed lawsuits for unfair business practices. If you feel you’ve been harmed by any mortgage servicer, are facing foreclosure, or are having mortgage modification issues, contact us to see if we can help.