May 12, 2017
Today the Consumer Financial Protection Bureau is filing a lawsuit against Ocwen, one of the nation’s largest nonbank mortgage servicers. We are seeking relief to compensate consumers for years of systemic and significant errors throughout the mortgage servicing process, which cost some of them their homes. We allege that Ocwen calculated loan balances improperly, misapplied borrower payments, and botched escrow and insurance payments. We believe Ocwen failed to properly investigate and fix these problems when people formally complained, and it illegally foreclosed on borrowers. And we believe Ocwen compounded these failures by selling the servicing rights to these loans without fully disclosing or correcting errors in people’s records. We are filing this case at the same time that the Florida Attorney General is filing a similar lawsuit and many state regulators are independently filing cease-and-desist orders over their concerns about Ocwen’s business practices.
The mortgage market is the largest consumer financial market in the United States, worth some $10 trillion in mortgage loans owed by consumers. Mortgage servicers are responsible for managing these loans, and thus play a central role in the lives of homeowners. They are the link between the mortgage borrower and the mortgage owner. They collect and apply payments. They work out modifications of loan terms. And they handle or oversee the often painful process of foreclosure. Notably, consumers are stuck with their mortgage servicer, regardless of how they are treated. In this market, consumers cannot choose simply to take their business elsewhere.