UNITED WE STAND, AURORA WILL FALL
Here's an article about Ocwen, another servicer like Aurora. Please note the attorneys. They are the ones I have contacted and will be talking with this week.
By Brian Collins
Several lawsuits have been filed in
The federally chartered thrift disputes all the allegations and says it has taken steps to improve its servicing operation. "We believe the allegations to be baseless and without merit," Ocwen general counsel Paul Koches told Mortgage Servicing News. "And we will be vigorously defending that in court." (Mr. Koches represents the thrift and its parent, Ocwen Financial Corp., which also is based in
The same
Once the FTC announced the
Consumer attorneys believe the incentive system built into subprime servicing encourages companies to generate fees by pushing loans into default, as opposed to arranging workouts when borrowers get into trouble.
"I think
Unlike
"We have been working for some time very closely with Ocwen to address the number of concerns related to their servicing of subprime loans," OTS spokesman Kevin Petrasic said.
Ocwen's practices are "extremely similar" to
Ocwen "engages in a systematic and deliberate unlawful scheme to cheat homeowners out of millions of dollars in bogus and illegal fees and charges," according to the lawsuit.
The lawsuit alleges that the plaintiffs, Allie and Jerry Maddox, lost their
Mr. McCarthy noted, however, there are a couple of unique things about the way the federally chartered thrift operates that are different from
If the monthly payment is due on the 17th of month, Ocwen charges a late fee on the 15th or 16th even if the payment comes in on the 17th. "That is exactly what happened to our client," he said.
Ocwen said it uses an independent lockbox provider that is required to process all payments within 24 hours for automatic posting.
Another problem at Ocwen is the failure to respond to their customers, Mr. McCarthy said, particularly for requests for payoffs and efforts to avoid foreclosure. "We get all types of phone calls from people who say there is absolutely no response whatsoever when they are trying to arrange a buyout or some kind of a workout of the foreclosure."
Even if they get in contact with an Ocwen representative - they are not responsive. The response is "we are not going to work with you" or "we don't want the money," Mr. McCarthy said. "That is downright cruel when someone is trying to save their home."
Ocwen said it employs a "consultative approach to customer relations where we seek a mutually satisfactory resolution of the issues."
Ocwen also said it leads the industry with an 80% delinquency resolution rate. "This means that in eight out of 10 severely delinquent loans, we are able to achieve a resolution in which the borrower avoids losing their home to a foreclosure."
Meanwhile, attorney Daniel Mulligan filed a class action against Ocwen in the
The complaint - in Geneva Spires v. Ocwen - alleges that the servicer collects late fees when payments are on time and charges for force-placed homeowners insurance when the property is already insured. That’s what aurora did to me.
Once a loan goes into default, Ocwen allegedly imposes and collects fees for property inspections, appraisals and broker price opinions in excess of the costs and for services not performed.
"Specifically, Ocwen has engaged in a pattern and practice of charging unwarranted attorney's fee for properties it has erroneously categorized as being in default," the complaint says.
The partner at Jenkins & Mulligan in
In a separate lawsuit, Mr. Mulligan sued Ocwen in December 2002, alleging the subprime servicer charges unwarranted attorney fees (usually $95) when homeowners reinstate their loans. The case, which is before a state court, is currently in discovery and a hearing on class certification is scheduled for May.
Another
"To generate revenues for itself, Ocwen has engaged in a scheme by which it levies unwarranted and unlawful late fees on its customers and uses a customer's alleged lateness to improperly assess other fees, up to and including fees associated with the erroneous preparation of default and foreclosure proceedings," according to the complaint in Patricia Antoine, Jon De Kerguelen and Rosalind DeKett v. Ocwen Financial Services Inc. and Ocwen Federal Bank.
Lieff, Cabraser attorneys also are involved in the
Ocwen considers the
"The litigation against Ocwen is misdirected. The litigants should consider the facts - facts that our rating agencies, investment banks and others familiar with Ocwen have found - that our servicing business is federally regulated, legally compliant and industry-leading in terms of mutually beneficial resolutions with borrowers," Ocwen president Ronald Faris said.
General counsel Koches said he is not aware of any investigations by the Federal Trade Commission or the Office of Thrift Supervision involving the company's servicing practices.
OTS had not taken any enforcement actions against Ocwen. But the agency is keenly aware of the consumer complaints about its mortgage servicing operation.
OTS officials attribute these complaints partly to the difficulty of servicing subprime loans and the size of Ocwen's portfolio. The
Ocwen recently won a contract from the Department of Veterans Affairs to manage and sell VA-foreclosed single-family properties. VA is currently transferring 12,000 properties to Ocwen.
Back in July 2002, a
"It is clear that this is a pattern and practice of shear piracy," Mr. Hanson said in an interview. He said he has collected hundreds of sworn affidavits from individuals who have been injured by Ocwen. The case is still in discovery. Mr. Hanson does not expect to get a hearing for class certification until after April. The lawsuit seeks $1.5 billion in punitive and exemplary damages. Ocwen claims the Hanson lawsuit is without merit.