Justice Department fines Ocwen subsidiary for foreclosing on military members’ homes

PHH agreed to pay a $750K fine to settle the charges

TRD NATIONAL /
Feb.February 08, 2019 03:30 PM

Ocwen’s Glenn Messina (Credit: iStock)

UPDATED, Feb. 11, 10:54 a.m.: A subsidiary of Ocwen agreed to pay a $750,000 fine to the Justice Department in order to settle allegations that it illegally foreclosed on the homes of service members of the U.S. military.

The federal agency alleges PHH Mortgage Corporation, a mortgage servicer that was acquired by West Palm Beach-based Ocwen last year, violated the Servicemembers Civil Relief Act (SCRA) by foreclosing on the homes of six service members without obtaining the required court orders, according to a Justice Department release.

The Justice Department launched an investigation along with its Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey after it received a complaint in May 2016. The investigation revealed that PHH Mortgage foreclosed on six homes of service members between 2010 and 2012. It’s illegal to foreclose on active military members homes during their service and one year afterward without a court order.

In a statement, PHH Mortgage said it cooperated with the Justice Department’s investigation and “voluntarily agreed to compensate the service members without admitting any wrong doing. PHH decided to settle this matter because it was in the best interest of these service members, and allows the company to move forward and avoid protracted litigation.”

PHH Mortgage and Ocwen have faced other allegations of improper foreclosures or mishandling of mortgage payments.

Ocwen acquired PHH Mortgage in October for $360 million, after its third quarter ended on Sept. 30.

Ocwen once had a market capitalization of more than $6 billion and made a fortune servicing subprime mortgages from banks after the financial crisis. U.S. Commerce Secretary Wilbur Ross was a member of its board of directors, and its founder Bill Erbey’s net worth was valued at $2.8 billion in 2013, according to Forbes.

In the last few years, however, the company has faced numerous financial and legal challenges. Regulators alleged that Ocwen mishandled consumers’ mortgage payments and illegally foreclosed on homes. In 2013, Ocwen reached a $2.1 billion settlement with the federal government and 49 states to address allegations of mortgage servicing misconduct.


Related Articles

arrow_forward_ios
1515 Sunset Drive and Facundo Bacardi

Bacardi-owned company sues construction firm for defects and delays at Coral Gables office development

30 Indian Creek Island Road and Shlomo Alexander

The Alexander Group allegedly mismanaged and then refused to complete Indian Creek Island mansion: lawsuit

Power struggle between Fisher Island association’s directors ignites lawsuit

Echo Brickell and PMG principal Ryan Shear

Construction of Echo Brickell allegedly damaged neighboring condo building: lawsuit

Miami Beach Mayor Dan Gelber and Natalie Nichols home at 1531 Stillwater Drive (Credit: Getty Images)

Miami-Dade judge strikes down Miami Beach short-term rental ban

ADF lawyer Stuart Sobel and Virgin MiamiCentral

Virgin MiamiCentral station developer and builder to pay $10.5M settlement

Greg Mirmelli’s vacation rental property at 2120 Bay Avenue in Miami Beach

Renter sues for $57K refund linked to illegal Miami Beach short-term rental

3055 North Miami Avenue and Alex Vadia (Credit: Midtown Opportunities, TAMZ)

Controversial Walmart site in Midtown Miami sells for $26M

arrow_forward_ios