The Real Deal New York

Deal with US doesn’t dim Ocwen as portfolio hits $500B

February 03, 2014 01:18PM

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

  • Charles Reed

    Who’s loan were these that Wells Fargo is selling they are saying now they only were servicing? The were servicing 1.3 million of Washington Mutual Bank (WaMu) government insured loans, and a few of some other banks the WaMu was servicing before the mortgage servicing sale on Jul 31, 2006.

    Wells Fargo got some problems pretending as the lender of loans they did not own with WaMu! False Claim against the Federal Government!

  • Jonathan Yunason

    Charles, I am surprised they are waiting to so long to unload this. Investors and homeowners are waiting for this stock of debt to be released.