Ocwen Financial Corporation – a company that specializes in servicing large portfolios of underwater, delinquent and subprime mortgages – has amassed a $500 billion servicing portfolio, even in the wake of a recently settled mortgage fraud lawsuit.
The Atlanta-based mortgage servicer picked up $39 billion in servicing rights last month from Wells Fargo Bank. Ocwen has done a number of big acquisition deals over the past three years with Goldman Sachs, JPMorgan Chase and other banks.
But the expansion has not been without obstacles. The servicer agreed to a $2.2 billion settlement in December over a lawsuit filed by the U.S. Consumer Financial Protection Bureau. The bureau accused Ocwen of taking too long to credit the loan payments of borrowers and requiring mortgage-holders to purchase expensive insurance policies.
Of the $2.2 billion settlement, $67 million will be paid in cash to victims of a wrongful property foreclosure.
Some have criticized Ocwen for not permitting homeowners to switch mortgage servicers if they prefer not to work with them.
“We believe Ocwen violated federal consumer financial laws at every stage of the mortgage servicing process,” Richard Cordray of the Consumer Financial Protection Bureau told the New York Post. [NYP] — Mark Maurer