Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us
arkygirl
Mwahaha! Wonder how the king of worms will wriggle out of this one??


Dec 19 (Reuters) - U.S. officials on Thursday ordered the largest nonbank mortgage servicer to provide $2 billion in help to underwater borrowers to resolve allegations of misconduct that led to thousands of people losing their homes.

Ocwen Financial Corp must reduce loan balances for struggling homeowners and refund $125 million to foreclosed borrowers under an agreement with the U.S. Consumer Financial Protection Bureau and officials from 49 states and the District of Columbia.

Ocwen failed to account for borrowers' payments, gave false reasons for denying loan modifications and robo-signed legal documents, the consumer bureau said.

In many cases, after Ocwen began servicing loans, it did not respect trial modifications that had already been agreed to by the lenders, consumer bureau Director Richard Cordray said.

"After examining the potential violations, we've concluded that Ocwen made troubled borrowers even more vulnerable to foreclosure," Cordray said in a conference call with reporters.

Ocwen separately disclosed the agreement on Thursday and said it had already set aside funds to cover all but about $500,000 of the required refund payments.

"The agreement, which is subject to court approval, is in alignment with the same ultimate goals that we share with the regulators - to prevent foreclosures and help struggling families keep their homes," Ocwen said in a statement.

The firm did not admit to the allegations, according to court documents.

Mortgage servicers include banks and nonbank firms that collect borrowers' payments, communicate with them about modifying loans in distress and handle foreclosure processes.

The consumer bureau, which was created by the 2010 Dodd-Frank law, has written tough new rules for the industry that take effect in January. Cordray said that, under those rules, Ocwen would have had even more servicing violations.

More here:

http://in.reuters.com/article/2013/12/19/financial-regulation-ocwen-idINL2N0JY1CA20131219



Quote 0 0
Sharon
I wonder what this means for homeowners that have an active state or federal case against Ocwen?
Sharon
Quote 0 0
MSF Moderator
CFPB v. OCWEN Consent Judgment


Another Slap on the Wrist for a Company That Abused Homeowners

The year just wouldn’t be complete without one final dubious financial fraud settlement. A consent order between the Consumer Financial Protection Bureau, every state but Oklahoma, and the mortgage servicing company Ocwen again shows the continued, systemic mistreatment of American homeowners. Ocwen stands accused of “violating consumer financial laws at every stage of the mortgage servicing process,” according to CFPB Director Richard Cordray. But under this settlement, their executives will face no criminal charges, the firm will not actually pay the large majority of the penalties themselves, and they did not even have to admit wrongdoing in the case. Merry Christmas.

Ocwen built their servicing empire in part by purchasing the rights to handle mortgage accounts from big banks like JPMorgan ChaseBank of America and Ally Bank, the same ones that settled their own cases of mortgage servicing abuse in the $25 billion National Mortgage Settlement in February 2012. So to recap, big bank servicers abused homeowners, paid a nominal fine, and sold their servicing operations to non-bank servicers like Ocwen, who routinely engaged in identical practices. This game of Whack-a-Mole, with customer accounts passed around from one rogue business to another like a hot potato, shows that the problem lies with the design of the mortgage servicing industry itself, not the individual companies.

“Too often trouble began as soon as a loan transferred to Ocwen,” said CFPB Director Cordray on a conference call announcing the enforcement action. The complaint, filed in federal district court in D.C., alleges that Ocwen charged borrowers more than stipulated in the mortgage contract; forced homeowners to buy unnecessary insurance policies; charged borrowers unauthorized fees; lied in response to borrower complaints about excessive and unauthorized fees; lied about loan modification services when borrowers requested them; misplaced documents and ignored loan modification applications, causing homeowners to slip into foreclosure; illegally denied eligible borrowers a loan modification, then lied about the reasons why—the list goes on

These violations are almost exactly what big bank servicers did to homeowners, triggering the National Mortgage Settlement. As a result, homeowners who found themselves in trouble during the Great Recession could not get an effective shot at saving their home, were improperly shuffled through the foreclosure process with false documents, and were stolen from up and down the line. Ocwen’s conduct affected an estimated 185,000 borrowers who faced foreclosure from 2009 to 2012, as well as millions more still hanging on in their homes. 

If the crimes are familiar, the punishment is similarly reminiscent of the toothless way regulators and law enforcement penalize financial firms. Ocwen does not have to admit wrongdoing in the consent order, shielding them and their executives from any legal exposure. Foreclosure victims who already lost their homes from Ocwen’s abuse will get a share of $127.3 million in restitution. Florida Attorney General Pam Bondi admitted on the conference call that this is likely to translate into a $1,200 check per family, which sounds more like an insult than just compensation for the pain and suffering of an illegal eviction. An additional $2 billion will go toward principal reduction for “underwater” homeowners who owe more on their loans than their houses are worth. 

But Ocwen will pay that penalty with someone else’s money. As a non-bank servicer, they don’t actually own any of the loans. They merely service loans, collecting monthly payments and dealing with loan modifications and foreclosures, for investors who purchased them as part of mortgage-backed securities. So principal reductions on these loans hit the investors, not Ocwen. While it’s true that principal reductions often generate better outcomes for investors than letting a home go into foreclosure, Ocwen itself suffers no actual penalty for what was solely their misconduct. Ocwen also noted in a regulatory filing that they would split nearly half of the $127.3 million cash payout to foreclosure victims with the servicers who previously serviced the loans. So their total exposure for all this is $66.9 million, which they have already mostly covered with a dedicated cash reserve. 

The CFPB’s Richard Cordray objected to this critique, claiming that arranging the principal reductions will cost Ocwen in manpower and administrative expenses, and that if the company does not achieve the $2 billion in principal reductions within three years, they will have to pay the balance off in cash. But that’s hardly a big hurdle, and I don’t think any reasonable observer would argue that trivial administrative costs—which Ocwen undertakes as a matter of course in its role as a loan servicer—fit the crime of turning hundreds of thousands of homeowners into the street under false pretenses, and cheating millions of others. 

As with the recent JPMorgan Chase settlement that mandated principal reductions, it’s homeowners who may suffer the most. The Mortgage Forgiveness Debt Relief Act is set to expire December 31, and after that, any principal reduction will be treated as earned income for the homeowner, exposing them to large tax bills they cannot afford. Attorney General Bondi at least stressed the need to extend the relief and protect homeowners from huge tax liabilities. “Struggling homeowners are depending on this relief,” she said on the call. Bondi co-authored a letter to Congress signed by 42 attorneys general asking for an extension. But the House has already left for the year, and Senate Republicans blocked consideration of an extension on Thursday.

Ocwen’s unlawful procedures are symptomatic of the entire industry. They grew to become the nation’s fourth-largest servicer, and the largest one that’s not also a bank, by scooping up servicing rights discarded by those also caught abusing homeowners. If the new standards become too burdensome, presumably Ocwen will just dump off servicing rights to a new fleet of fly-by-night operations with even worse business practices. And homeowners, who don’t get to choose their servicer, will get caught in the middle. 

Indeed, the wrongdoing alleged in the Ocwen case occurred through 2012, showing that this misconduct is ongoing, despite a massive settlement with the industry’s biggest players earlier that year. A recent CFPB report discovered similar ongoing abuses among servicers, and overseers of the National Mortgage Settlement have documented non-compliance with their court-mandated rules. New York Attorney General Eric Schneiderman sued Wells Fargo for violating settlement terms. Banks arestill robo-signing and illegally foreclosing on borrowers. This just seems like an endless race that regulators never win.

CFPB believes the new servicing rules which trigger January 10 will give them more leverage to battle misconduct, with higher penalties. For the first time, non-bank servicers like Ocwen will be covered under the rules (making the servicing standards Ocwen must adhere to in this settlement mostly redundant). And settlements like this, Richard Cordray said, will gradually extend protections and secure relief over the whole market. “We intend to improve the performance of the mortgage servicing industry for all homeowners,” Cordray said.

But constantly finding violations of exactly the same type over and over again suggests that servicing itself is the culprit. Its business model relies on the types of fees generated by defaults and foreclosures; they would rather foreclose on a loan than modify it. And CFPB’s new servicing rules do not change the compensation structure that creates these mismatched incentives.

Until the entire business of mortgage servicing is overhauled, we’re likely to see more and more one-off settlements that come too late for abused homeowners, and which seemingly offer no deterrent for the abusers. “There’s no one solution to this enormous problem that we’ve seen for homeowners,” acknowledged Iowa Attorney General Tom Miller. Actually, with the current thinking among regulators, there’s no solution at all.

David Dayen is a contributing writer at Salon

Also see The Ocwen Story from 2005 - the $11.5 million judgment in the Davis case.

Quote 0 0
MSF Moderator
Email from Lisa:

I wanted to send you a email just to let you know how much you have helped me and my family with all your hard work and dedication to these horrible mortgage issues we have faced. Ocwen tried to steal my house a few years ago. We lost about 50 or 60 grand to them. 

We had gotten almost to the point to where the eviction was inevitable.. I had let these issues eat me up inside. I became a severe alcoholic, and very withdrawn. We packed most of the house and then I got very sick with pneumonia and almost died. 

Shortly after my return from the hospital and only by the grace of God did they not kick us out while I was in intensive care.  I found your Forum and began to have some hope that we could save our home. 

Like most of us , nobody believed our story. I showed my Dad the MSFraud Forum and he began to believe what I was saying all along for years of the torture Ocwen put us through. My parents decided to buy the house so we could at least stay here. 

Shortly after the closing we started receiving checks back from Ocwen stating the interest was calculated wrong , over payment of insurance etc.; all the things we were fighting for. We still lost a lot of money but at least my family knew that we were not lying. Which was more important to me than any house. 

Quote 0 0
MSF Moderator
Posts from our 2003 Forum archives:

OCWEN Posted by Kweku)

I have sat on the sidelines and read the never-ending stories of fraud and frustration which have become the legacy of American homeowners. It was this brazen piracy which compelled me to find my lawyer to file a federal nationwide class action lawsuit against Ocwen, Moss Codilis and Litton. And I thought, naively as it turns out, that what the regulatory agencies and state courts had somehow missed---naked stealing of our mortgage monies by Ocwen and its co-conspirators---would be quickly identified and halted by the federal courts.

Boy, oh boy was I wrong about the "quickly" part. Federal court litigation is a time-consuming process, even when Ocwen's own workers are submitting sworn statements about the fraud that occurs deep inside the bowels of Ocwen. Even when Moss Codilis workers state under oath that Moss Codilis is engaged in outrageous and criminal behavior that in an upside-up world would get these lawyers hauled before lawyer discipline agencies and get prosecutors hot on their tail.

While the Hanson v. Ocwen class action lawsuit is still alive and well in Connecticut, and while on March 23rd my lawyer (but not me---I have a criminal trial in Hartford) will be traveling to Jacksonville, FL to present oral argument to the MDL Panel about the pros and cons of combining all the Ocwen class action cases in one federal district court, I want to say that Marlene's suggestion sits very well with me.

While the Hanson class action has been pending, Ocwen has been taking people's homes. I know this because hundreds of you fellow victims have sent me sworn statements, canceled checks, emails by the thousands, and crazy monthly mortgage and/or collection statements by Ocwen and/or Moss and/or Litton where one month the amount owed is $85,000 and the next month the amount owed is $101,000. Huh????? Yep!!!!!

We still await a hearing on our July 2002 motion for a preliminary injunction to stop this thuggery. Meantime, folk, it's self-help and sel-preservation. The federal courts are taxpayer institutions which every American has a right of recourse to (it's guaranteed by the Constitution).

I personally do not care (I do not know how my lawyer feels, because I do not know if he has time to read this website every week like I and my enemies do religiously) if every victim of any predatory servicer in the country decides to take my lawyer's class action complaint (or the Fairbanks class action complaint and use it as a template to file their own FEDERAL CLASS ACTION LAWSUIT against any servicer who is abusing them. My lawyer's complaint must have been worth something because despite the passage of twenty (20) months, our lawsuit is still like a monkey on Ocwen's back, and indeed has spawned a few more.

Yes, the Hanson v. Ocwen complaint (available at the CBS News website and elsewhere on the internet in PDF format) accuses Ocwen of fraud, racketeering [RICO], violations of the Fair Debt Collection Practices Act; the Fair Credit Reporting Act; Negligence; Misrepresentation; Breach of Contract; et cetera, et cetera. And it is perfectly legal, as Marlene has indicated, for any victim to "do it yourself" and use the complaint in that lawsuit as a template for that victim's own lawsuit in that victim's own federal district court.

I gain nothing if 1,000 people frustrated by the pace of my nationwide class action case take matters into their own hands and sue Ocwen. By the same token, I lose nothing. If there are 1,000 class actions, it will make for a merrier MDL process, especially if the majority are by pro se litigants [victims who cannot or chose not to hire lawyers].

So, while I will not publicly advocate everyone rushing into their federal court to sue Ocwen using our lawsuit or the Fairbanks complaint as a model, I have no business discouraging anyone from doing so either. If you have to file for bankruptcy or sign a horrible forbearance agreement or file a copy cat federal class action lawsuit to buy yourself another 6 to 8 months against a fraudulent foreclosure, it's your choice. I have no vote in the matter, since the Hanson complaint is freely available online.

Meantime, as long as the Lord God Almighty enables me, I shall get up every day, and replenish my strength, and call my lawyer, and strategize with him, and continue to spend whatever money and time it takes to save my own home in the process get a nationwide class action certified. When even supervisory employees of these entities are swearing under penalty of perjury that our funds are being misappropriated, and when my own cancelled checks prove empirically to my 9th grader kid that I was NEVER in default, and when Ocwen continues to lie, cheat and deceive [selectively submitting emails from its own employees to try to show that somehow the information they sent of their own volition was coaxed out of them by me, but then fails to submit other emails from those same employees saying how much fraud is going on inside Ocwen's walls, you better believe that I am not going to go quietly away into the night. Ditto for every victim out there of every predatory servicer.

We will turn from being the hunted to becoming the hunters; we will go from being prey to pursuing the predators. We will watch to see if the AGs, the FBI, the SEC, the FTC, HUD, OTS, and other alphabet soup law enforcement agencies which are funded by our taxes indict, investigate, charge, arrest, and ultimately imprison some of these industry "leaders." We will take matters into our hands within the bound of existing law and fight like mad to save our homes from fraudulent foreclosures.

We will give these guys a run for their money, because all the corporate defense lawyers in America cannot defeat a people united in their determination to stop piracy in its tracks, spend what they may. The Hanson class action is already a living example of that adage. And if we lose, the same appellate courts utilized by the big guys are available to the little guys (viz., you and me)! Thank God!

And if any predator is foolish enough to run into court to try to get an injunction stopping me from posting online, I shall use that court occasion to argue our long-sought preliminary injunction, and I know hundreds of you have already pledged to come up in a show of support for that day. Periodically during the past year, several of you at random have received evidence of fraud and so forth dispersed by me to prevent anyone moth from breaking in and devouring the proofs before we all have our day in court. The whole country cannot be silenced. Like the millions of Spaniards [Marlene, I now know where your courage comes from] who marched against terrorists last weekend, we are also marching in unison against this tragedy that has gone on for far too long. And despite the fact that Al Qaeda could have tried another bombing attack on the millions of marchers, they were not intimidated, and neither shall we even if some of us are picked off literally or figuratively.

Plus, as a lawyer myself, I shall use every legal mechanism to ensure that my first amendment rights are not squashed by any thugs.

UPDATE:  Shortly after this post, the lawyer conveniently ended up in prison.


Inside Information on how you may get scammed. (posted by Nye)

Ok, here is something new I have learned from an inside source.  Many loans WHILE perfectly good with no problems, have been discovered to have KNOWN FRAUD in the file during a quality control audit or due diligence. This FRAUD could be the loan broker, prior servicer or someone OTHER THAN you and then gets classified as a loan that has been repurchased from the investor and goes technically back to the originator.


These loans are then packaged and sold to the Crooks at EMC, Ocwen, Litton, Fairbanks etc., which are known as the "toxic waste" dumps in the industry.

The key is to foreclose on them or FORCE a repayment or NEW LOAN MODIFICATION so that the original fraudulent loan is now void and a new loan takes place. Now the fraud is concealed.

These crooks intentionally put you into foreclosure or an inability to pay, to FORECLOSE on you to reduce the LARGE exposure to them and their fellow crooks.

That’s it in a nutshell; and a new motive that we have discovered with the help of some insiders.

Fannie now refuses to answer ANY of my questions since they say that regulators are investigating my complaints.  As a stockholder I want answers!

Second, they won't even agree to make their servicer’s disclose this to you if they are an investor or force their servicer’s to give you a complete title chain report and open MERS up to review and many other very SIMPLE things I requested as your right to obtain the master loan servicing record to get your loan properly audited.

This is from the highest levels of Fannie including their CEO and outside directors. What is Fannie hiding?

Members of press and media have told me that Fannie and Freddie may be behind many of your problems.  I will be suggesting new strategies in days to come.



The Errors Are Usually Intentional.(posted by mnjones)

The errors are usually intentional; an effort to confuse the homeowner and cause them to make a mistake. Ocwen doctored the books when they sold the rights to my mortgage to Fairbanks (now SPS).  Fairbanks' letter telling me when I needed to make my first payment to them was very confusing (and late).  

When I called Fairbanks to ask them if I needed to make a payment for the current month, the rep said "no."  This was because Ocwen had given me a phony payment, so it looked to the rep like I was current.  After a couple of months, Ocwen reversed the phony payment.  Fairbanks then started accusing me of bouncing my payments.  They never said a word about the missed payment for the first month they serviced the loan. 

Because I was so busy trying to prove that I hadn't bounced payments, I never even thought about that first ayment.  I filed suit before they got me in foreclosure court, but the plan was to let me prove I hadn't bounced payments, then say, "and what about the first payment."  Because I thought I really didn't need to pay it, I would have been unprepared to defend myself and they would have taken my home.  My lawyer and I discovered all this while investigating in preparation for court.  He is filing a suit against Ocwen this next week for falsifying the account history. 
So, I am suing both Fairbanks and Ocwen. 
Also, I am working on going after Equifax and Experian.  I have sent both copies of my canceled (paid by the bank) checks for the months Fairbanks claims I am late, yet they continue their fraudulent reports. 

A classic story of how you can get scammed.

  (Posted by Mark)

Fairbanks acquired servicing rights from Ocwen.  When the rights transferred, Fairbanks wouldn't accept a payment for their first month.  They claimed they couldn't accept payment for thirty days after they notified me of the change.  I tried to pay Ocwen.  They wouldn't accept payment either, saying

they no longer even had me in their computers.

As instructed, I waited the thirty days Fairbanks, then tried to pay again.  Now Fairbanks said: “I didn't need to pay, my account was current.”  I was dumb in those days, and thought they would come screaming for a payment when they found their mistake.

 

Three months later, Fairbanks started claiming I had bounced payment checks.  Of course, I can prove I didn't bounce checks.  Their real ace in the hole when we get in court will be the payment I didn't make.  Just to be complete, and try to discover why Fairbanks reps told me my account was current when it was a month behind, I asked Ocwen for a copy of my payment history. 

Well, they stalled and tried to fake me out and a bunch of other stuff, but I finally found someone there who didn't know I wasn't supposed to get a payment history, and they faxed me one. 
Ocwen falsified my payment history for two months after Fairbanks took over.  Of course, this was part of the plan.

Now, when we get to court, Fairbanks can blame everything on Ocwen, and back and forth.  It is a mess.

Does any of this sound familiar 10 years later?

Quote 0 0
bankbuster
"We The People", once again getting the dirty end of the stick. Wanna know why??? It's because we've allowed ourselves to be dictated to, and repeatedly run over by a bought government with out so much as a strong whimper....Tarp bailout (corporate socialism) for the banks and their buds that crashed the economy....No outrage....The states AG's get together and workout a "settlement agreements" with the criminals that crashed the economy, caused millions to lose their jobs, homes, and lives, and the general public doesn't have enough testosterone producing glands to demand justice for the masses. We witness the blatant hypocrisy of how our government appoints the Wall Street crooks to positions that assure that their crimes are not prosecuted or brought to light, and "We The People" stand by while these same treasonous beneficiaries get bonuses and settlements, many times with our money. The Federal Reserve, and the government that emanates from it, needs to go. "We The People" need to organize and rise up in open revolt, or be satisfied with the tyranny and oppression that will do nothing but wax worse at the hands of those that have been enslaving us for generations.

Thomas Jefferson: Single acts of tyranny may be ascribed to the accidental opinion of a day. But a series of oppressions, begun at a distinguished period, and pursued unalterably through every change of ministers (administrations), too plainly proves a deliberate systematic plan of reducing us to slavery.


I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.Thomas Jefferson(Attributed)
3rd president of US (1743 - 1826)         
Quote 0 0
texas
bankbuster said: ""We The People", once again getting the dirty end of the stick. Wanna know why??? It's because we've allowed ourselves to be dictated to,"

incorrect assumption
Quote 0 0
bankbuster
I'm assuming nothing...The proof of my statements are based on historical fact. The Fed banking cartel got away with fraud, theft, murder, and has accomplished this on grand scale since it's inception (1913), with very little effort to stop them.  Now what part of that am I assuming, and what do you fail to see?
Quote 0 0
texas
Not the same statement as prior statement.
Quote 0 0
bankbuster
Well how's this....Collectively we have gotten the dirty end of the stick, and yes, we are being dictated to by the power$ that be in the good ol U$ of A....If it weren't the case, "We The People" wouldn't be getting kicked out of our homes illegally... You should try lending credence to your statements by backing them with fact, instead of arguing just for the sake of it.

    
“When the people fear the government there is tyranny, when the government fears the people there is liberty.” 
― Thomas Jefferson
Quote 0 0
texas

    “When the people fear the government there is tyranny, when the government fears the people there is liberty.” 
Thomas Jefferson

Nice recital, facts have been stated and actions have been taken, so question arises, what actions do the people need to execute for liberty to prevail?

Quote 0 0
bankbuster
One more time, maybe you won't miss it again...

"We The People" need to organize and rise up in open revolt, or be satisfied with the tyranny and oppression that will do nothing but wax worse at the hands of those that have been enslaving us for generations.
Quote 0 0
NJ48
Recent Ocwen Assignment of Mortgage. Nothing has change.

No consideration.
Servicing Rights are the new norm as for substitution(transfer) of ownership.
Perjury-Notary acknowledges that Authorized Signer is an "Attorney-in-Fact" for both Ocwen and OneWest Bank.
Witnessed, acknowledged and notarized in Montgomery County, Pa. Recorded in Bergen County, New Jersey. No Power of Attorney recorded in N.J., as required.

Click image for larger version - Name: Ocwen_AOM3.jpg, Views: 17, Size: 903.82 KB
Quote 0 0
Sharon
NJ48 wrote:
Recent Ocwen Assignment of Mortgage. Nothing has change.

No consideration.
Servicing Rights are the new norm as for substitution(transfer) of ownership.
Perjury-Notary acknowledges that Authorized Signer is an "Attorney-in-Fact" for both Ocwen and OneWest Bank.
Witnessed, acknowledged and notarized in Montgomery County, Pa. Recorded in Bergen County, New Jersey. No Power of Attorney recorded in N.J., as required.



Did you sent away for the Notary's Commission Application?  Ocwen has been known to set up their Notaries to robo notarize documents. 
Sharon
Quote 0 0
NJ48
To Sharon:

We do. Thanks.
Quote 0 0
MSF Moderator

The Ocwen Settlement Numbers Are Wrong

December 30, 2013

The biggest news in 2013 relating to fraud by mortgage servicers came at the very end of the year when the Consumer Financial Protection Bureau, together with attorneys general and state banking regulators in 49 states announced a $2.125 billion settlement with Ocwen Financial Corporation and Ocwen Loan Servicing, the largest nonbank mortgage loan servicer in the country. The settlement also included two very large servicers recently purchased by Ocwen, American Home Mortgage Servicing, Inc. (“AHMSI), most recently known as Homeward Residential Holdings, LLC, and Litton Loan Servicing, LP (“Litton”).

Most of the settlement, $2 billion, was earmarked for principal reductions for underwater borrowers.  According to the press release on the National Mortgage Settlement website, “Ocwen must also refund $125 million to the nearly 185,000 Ocwen, Litton and Homeward borrowers who have already been foreclosed upon…” The problem with this statement is that the number of former homeowners wrongfully foreclosed upon with the assistance of these three servicers far exceeds 185,000.

Only a relatively small number of foreclosures were brought with Ocwen, Litton or AHMSI as the named plaintiff in the court cases.  That number may be close to the 185,000 stated in the press release.  In tens of thousands of other cases, the named plaintiff was a bank/trustee acting on behalf of a residential mortgage-backed trust. In those cases, the critical loan documents needed to “prove” the  banks’ cases came from Ocwen, Litton and AHMSI.  That plain truth is not only ignored by the settlement, but the press release certainly would make a reader wrongly conclude that the damage done by these servicers was far less than the actual damage inflicted on homeowners, neighborhoods and the national economy.

The document mills operated by Ocwen, Litton and AHMSI produced the phony documents that the trusts used to foreclose.  Ocwen provided fraudulent assignments and/or note endorsements to approximately 200 trusts, Litton provided such assignments to approximately 50 trusts.  AHMSI, and its business partners Lender Processing Services and DocX, provided such assignments to at least 500 trusts, including most of the trusts comprised primarily of loans made by Option One Mortgage Corporation or American Home Mortgage, and its subsidiaries, American Brokers Conduit and American Home Mortgage Acceptance, some of the nation’s largest subprime lenders in 2005 and 2006, the peak residential mortgage-backed trust years.

Assume these 750 trusts had an average of 5,000 loans per trust, or 3.75 million mortgages combined.  Assume a default rate of 50%. Then approximately 1.875 million homeowners in foreclosure were beaten out of their legal defenses with phony documents – not the 185,000 number used in the settlement. Who decided the adequacy of this relief?

The checks may be more, especially if Rust Consulting handles the distribution.  Rust will not be able to find many of the intended recipients.  Other intended recipients will not bother to take the Rust Consulting check to the bank, fearing the fee for a possible NSF check will outweigh the amount of the relief. Even at $1,200 per household, as predicted, the compensation for a lost foreclosure case that was prosecuted using fraudulent documents seems grossly inadequate.

 

OCWEN NOT REQUIRED TO ADMIT WRONG-DOING 

As with many settlements, Ocwen was not required to admit to any wrong-doing under this settlement.

 

NO CONCURRENT CRIMINAL PROSECUTIONS

No one from Ocwen, or AHMSI or Litton was arrested.  Scott Anderson, a vice-president of Ocwen, who signed tens of thousands of mortgage assignments to trusts with false information about when the trusts acquired certain mortgages, and who also signed thousands of fraudulent note endorsements/allonges, was not charged with any crime.  No one who worked with Scott Anderson at Ocwen who signed his name on mortgage documents that were then “witnessed” and illegally notarized, was charged with any crime.

No one from Litton was charged with any crime.  The notorious Litton robo-signers, Denise Bailey, Diane Dixon and Marti Noriega, were not charged with any crime, including any charges relating to signing thousands of mortgage assignments specially made to use in foreclosures and bankruptcies, all with false information about the date trusts acquired mortgages.  No one from Goldman Sachs, the company that owned Litton until 2011 when it was sold to Ocwen for $263.7 million, was charged.  Bailey, Dixon and Noriega most often executed documents showing transfers to trusts that had been put together by Goldman Sachs.  While the genral rule in white collar cases is to follow the money, this rule was not applied where the money trail led to Goldman Sachs.

No one from American Home Mortgage Servicing was charged with any crime.  The prolific signers from the Jacksonville office of AHMSI, including Elizabeth Boulton, Alisa Dhimitri, Theresa Esposito, Andrew Fuerstenberger, Michelle Halyard, Michael Hunt, Joseph Kaminski, Silena Rivera, Kathy Smith, Cynthia Stevens and Carolyn White were not charged and may continue business as usual.

No one from American Home Mortgage Servicing was charged with any crime for signing mortgage assignments purporting to transfer mortgages to trusts long after such trusts had closed, and on dates when such transfers never occurred.

No one from American Home Mortgage Servicing was charged with signing as officers of Sand Canyon Corporation to transfer mortgages from Sand Canyon years after Dale Sugimoto, the president of Sand Canyon, submitted a declaration (signed on March 18, 2009) stating that Sand Canyon no longer owned any residential mortgages.

No one was charged with signing mortgage documents that represented that AHMSI owned certain mortgages when, in fact, AHMSI only acted as servicer for such mortgages.

None of the three servicers was charged with any crime for pursuing foreclosure litigation in the name of a bank or trust when they had actual knowledge that a different bank or trust actually owned the note and mortgage.

  

THE CFPB ALLEGATIONS

The complaint, filed in federal district court in D.C., alleges that Ocwen charged borrowers more than stipulated in the mortgage contract; forced homeowners to buy unnecessary insurance policies; charged borrowers unauthorized fees; lied in response to borrower complaints about excessive and unauthorized fees; lied about loan modification services when borrowers requested them; misplaced documents and ignored loan modification applications, causing homeowners to slip into foreclosure; illegally denied eligible borrowers a loan modification, then lied about the reasons why; and engaged in illegal foreclosure practices, including using robo-signed documents.

 

TAXES ON DEBT FORGIVENESS

The Mortgage Forgiveness Debt Relief Act is set to expire December 31, and after that, any principal reduction will be treated as earned income for the homeowner.  A homeowner may escape a debt to a bank or mortgage company through a bankruptcy proceeding, but the new IRS debts created by principal reductions cannot be wiped out.

 

DUBIOUS ACHIEVEMENT

The new settlement achieved more promises by Ocwen, a company with a long history of broken promises, with very little relief to homeowners who have managed to stay in their homes, and no meaningful compensation for homeowners who have already lost their homes.  Perhaps the biggest failure is that the banks and servicers do not need to withdraw any wrongfully filed document with any Recorder of Deeds anywhere in the country, nor notify a single foreclosure court that filed documents are fraudulent.  For banks and servicers, the settlement was yet one more gift from the nation’s financial watchdogs.

Quote 0 0
Sharon
MSF Moderator wrote:

The Ocwen Settlement Numbers Are Wrong

December 30, 2013

DUBIOUS ACHIEVEMENT

The new settlement achieved more promises by Ocwen, a company with a long history of broken promises, with very little relief to homeowners who have managed to stay in their homes, and no meaningful compensation for homeowners who have already lost their homes.  Perhaps the biggest failure is that the banks and servicers do not need to withdraw any wrongfully filed document with any Recorder of Deeds anywhere in the country, nor notify a single foreclosure court that filed documents are fraudulent.  For banks and servicers, the settlement was yet one more gift from the nation’s financial watchdogs.



Goldman Sachs sold Litton to Ocwen because they needed to get rid of evidence that they used Litton to make bets on loans (they bet the loans would default) serviced by Litton and then forced them into foreclosure so they could win its bets.  Navigant Capital Management was appointed the reviewer of foreclosures for Litton and what a joke that is.  Right now Navigant and more specifically Neil Luria as CRO has successfully kicked all homeowners out of the Taylor, Bean and Whitaker, Mortgage Corp. bankruptcy with next to nothing even though their notes were sold possibly hundreds of times.  In the meantime Deutsche Bank's claim of $1.2B is allowed (in the TBW and Ocala Funding, LLC bankruptcies) because it is an interest rate swap and derivatives are exempt from adjustments in bankruptcy, its full claim amount will be allowed.  But all is not lost.  A little birdie told the FHFA about it and now the FHFA is going after DB for rigging LIBOR with Freddie and Fannie being on the losing end of the interest rate swap ( a derivative product immune to bankruptcy adjustments) bet. 
Sharon
Quote 0 0
Write a reply...