According to CPFB Director Richard Cordray, Ocwen “took advantage of borrowers at every stage of the process," which prompted the federal agency to intervene and show lenders that “deceptions and shortcuts in mortgage servicing will not be tolerated.”
Mortgage Loan Servicer Faces Steep Penalties for Illegal Activities
Sources say the proposed order would require Ocwen's subsidiary, Ocwen Loan Servicing, to provide at least $2 billion in mortgage principal relief to homeowners whose homes are worth less than their underlying mortgage loan. This principal relief would allow thousands of homeowners, including many Illinois residents, to reduce their principal obligations while keeping their loans intact.
According to reports, the order would also force the mortgage servicer to provide further relief. Ocwen would have to give 185,000 borrowers roughly $125 million worth of refunds for the company's fraudulent foreclosure actions, many of which affected Illinois homeowners facing foreclosure.
And the proposed order would send a clear message to other mortgage servicers that the federal government has little patience for violations of consumers' trust. Other companies that service mortgage loans, or extend them initially, will take note that regulators are placing extra scrutiny on their actions.
Federal Agency Accuses Ocwen of Mortgage and Foreclosure Fraud
Curious homeowners might want to know the extent of Ocwen's sins. The CFPB claims the mortgage company violated several state laws, as well as the federal Dodd-Frank Reform Act. Ocwen allegedly abused homeowners by assigning fraudulent servicing fees to thousands of mortgage accounts.
The company also failed to apply mortgage payments in a timely manner, and often lost track of accounting records for home loan. And when consumers complained about these fraudulent mortgage recording activities, Ocwen workers allegedly provided false or misleading information.
Finally, the company also convinced homeowners to pay for unnecessary force-placed insurance, and refused to tell homeowners about foreclosure alternatives. If you've suffered from any of these illegal foreclosure activities, through Ocwen or another mortgage servicer, contact a Cook County foreclosure lawyer today.