February 21, 2014

Ocwen Financial needs some good news. On February 19, 2014, Congresswoman Maxine Waters called for more regulatory scrutiny of the sale of billions of dollars of mortgage servicing rights to specialty firms. There are only two such big specialty firms buying most of these servicing rights, Ocwen Financial and NationStar.

Earlier in the month, Wells Fargo’s sale of $39 billion in mortgage servicing rights to Ocwen was halted indefinitely by Benjamin M. Lawsky, the head of New York’s Department of Financial Services.

There are, of course, many reasons for concern when any single entity quickly acquires as much as Ocwen has acquired:

June 2013– OneWest Bank sold $78 billion in mortgage servicing rights to Ocwen;

October 2012– Homeward Residential sold $77 billion (about 422,000 mortgage loans) in mortgage servicing rights to Ocwen;

October 2011– Morgan Stanley sold Saxon Mortgage Services, Inc. with $26.6 billion in mortgage servicing rights to Ocwen.

June 2011– Goldman Sachs Group, the parent of Litton Loan Servicing, LP, sold Litton to Ocwen with $41.2 million in mortgage servicing rights;

May 2010– Barclays Capital sold HomEq, its U.S. mortgage servicing business, to Ocwen with $28 billion in mortgage servicing rights.

If inquiry into Ocwen’s practices ever makes its way down to the nitty-gritty, the question may arise as to why Ocwen loses so many important loan documents. A visit (online or in person) to the Recorder of Deeds offices in almost any county in the country, to the Affidavits section in particular, reveals that most of the Lost Note Affidavits and Lost Assignment Affidavits are filed by Ocwen. In these Affidavits, an Ocwen employee always swears that Ocwen received these critical loan documents, the actual note and/or the mortgage assignment, but somehow lost the documents after receiving them. There was no fire or flood or strange theft – the documents were just lost, and yet, so swears the Ocwen employee, Ocwen is sure the originals were received by Ocwen. These Ocwen employees offering their sworn statements must have incredible memories, as Ocwen was responsible for processing hundreds of thousands of mortgage documents.

Example of Lost Assignment Affidavits filed by Ocwen:

How many times has this happened? How many times has Ocwen filed a Lost Note or Lost Assignment Affidavit? While an exact count would require extensive review by county recorders or investigators, thousands of these Affidavits have been filed across the country. These sworn Affidavits are then used in court cases, in foreclosures and bankruptcies– people lose their homes based on these documents.

After examining these strange Affidavits, it may be that someone with regulatory or congressional authority will examine the Mortgages Assignments and Note Endorsements (Allonges) prepared by Ocwen for Trustees of RMBS trusts. In tens of thousands of cases, Ocwen employees (often the same employees who swear that the loan documents were received, then lost) swear that mortgages were transferred and notes endorsed to RMBS trusts in 2007, 2008 and 2009, when these trusts closed in 2004 – 2006, and when the loans were already in default. Such transfers, if they occurred as Ocwen states, would violate the trust rules which could, in turn, cause serious tax consequences for the trusts. Like the Affidavits, these Assignments and Allonges are used in court cases, in foreclosures and bankruptcies, across the country.

Anyone with time to research, could, of course, assist Congresswoman Waters and Superintendent Lawsky by proving them with copies of these Ocwen-made Affidavits, Assignments and Allonges from county records nationwide.