The Real Deal Miami

Florida sues Ocwen alleging mishandled mortgages, illegal foreclosures

Florida represented 9.1 percent of its portfolio as of December
April 21, 2017 04:45PM

Ocwen CEO Ronald Faris and Florida AG Pam Bondi

More than 20 states, including Florida, and the U.S. Consumer Financial Protection Bureau are suing Ocwen Financial Corp., alleging it mishandled mortgages.

The West Palm Beach-based mortgage servicer’s shares plunged to $2.42 as of Friday afternoon, down from $5.45 at the opening of the market on Thursday. It has also been banned from acquiring new servicing rights in North Carolina and other states, the South Florida Business Journal reported. The company services 1.4 million loans nationwide with a principal balance of $209 billion, and Florida represented 9.1 percent of its portfolio as of December.

The Florida Office of Financial Regulation and Florida Attorney General Pam Bondi’s civil complaint seeks financial penalties and to compel Ocwen to follow the law. They said Ocwen and its subsidiaries filed illegal foreclosures, mishandled loan modifications, misapplied mortgage payments, failed to pay insurance premiums from escrow and collected excessive fees, according to the South Florida Business Journal.

The lawsuit alleges that Ocwen intentionally ignored advice from regulators about how to update its technology. Ocwen’s faulty loan servicing system generated improper fees, which led to borrowers defaulting and for some of them, foreclosures, according to the complaint. In addition to allegedly ignoring regulators’ advice, Ocwen is being accused of not adequately responding to customer complaints and requests for assistance.

It’s not the first time Ocwen finds itself in hot water. The loan servicer agreed to a $2.1 billion settlement in 2014 for 49 states, including Florida. [SFBJ] – Katherine Kallergis