Voice of the People
Ocwen, Allegations of Fraud, Malice, Misrepresentation and
Manipulation.
Ocwen Financial Corporation ("Ocwen") is a vertically integrated
multi-billion dollar, publicly traded (NYSE: OCN) financial services holding
company, engaged in a variety of businesses related to mortgage servicing, real
estate asset management, asset recovery and technology. Headquartered in West
Palm Beach, Florida,
Within a 12 month period this company has lost two major lawsuits alleging
fraud, malice, misrepresentation and manipulation totaling $14.5M. Other
allegations have been made by former and current employees including the
intentional destruction of information, and document forgery.
Why do so many people claim that Ocwen is ripping them off and wrongfully
foreclosing on their homes?
Is Ocwen really the bad guy?
Or are their customers failing to meet their obligations and looking for a
quick court buck?
This is the first in a series of stories about this company, Ocwen services
sub-prime mortgages. This means they service mortgages for people that have had
trouble paying their bills in the past. And Ocwen services a lot of these,
nearly 400,000 customers.
As part of this investigation we decided to review a typical Ocwen customer,
and a not so typical Ocwen customer. We will call them Mr. Smith and Mr. Jones
(these are real Ocwen customers) who have ask to not be identified because of
pending legal action.
Mr. Smith just had the loan servicing rights acquired by Ocwen in August of
2005. Mr. Smith has homeowners insurance through Prudential, his premiums are
paid and current. In September of 2005 Mr. Smith paid his regular monthly bill
to Ocwen with his old account #.
Mr. Smith had not received his new payment information from Ocwen and did not
want to be late on his payment. Ocwen cashed this payment and on Sept 22nd sent
him a letter (to the wrong address), stating he was late on house payment this
letter did not contain his new account and payment information.
Mr. Smith contacted Ocwen numerous times in writing and on the phone trying to
resolve this matter. Many times Mr. Smith would be routed to customer
representatives that spoke very poor or unintelligible English or would be
disconnected.
In October Mr. Smith still had not received his new payment information and
again sent another payment to Ocwen, which again they cashed and again sent a
letter, this time threatening foreclosure.
In November of 2005 Mr. Smith finally received his payment information, the
statement showed he was 4 months behind (yes 4 months when he had only been a
customer for 3) in his payments and fees had been added that he did not
understand, such as homeowners insurance and legal fees and late payment fees,
totaling almost $2600. Mr. Smith made another payment in Nov 2005 which was
returned by Ocwen stating they could not accept partial payments.
Mr. Smith was now receiving nearly daily calls from Ocwen collections, and Mr.
Smith responded in writing trying to rectify the situation. In December Mr.
Smith received another statement again with a promise of foreclosure and new
fees added in order to become current Ocwen now claimed he had to pay a sum of
almost $3600.
Now these fees were different from the statement he had received the month
before for the same items. Homeowners insurance went up $120, legal fees
increased by $277 and the house payment itself went down by $38.
Mr. Smith wanted to refinance, but it appears Ocwen has
already contacted the Credit Bureaus and reported him being late, he can’t get
refinanced.
How is this possible?
A former employee claims he knows exactly how it’s possible. “The RealServicing
software used by Ocwen and the Nightly Processing that reconciles the loan
accounts doesn’t work and hasn’t for several years. That’s why customers get
different payment information from month to month. It was a running joke in IT
on how long the system would be down everyday when it ran. This whole process
generated huge error logs that no one ever reviewed and it had been clear to
everyone involved in the process that it has major problems”.
Ocwen has sued a former consultant that performed a review on this software
claiming he has posted confidential information on the Internet and reported
this information to Government Agencies and this consultant has already
testified in a case against the company in which Ocwen was hit with a $3
Million verdict in Guzman V. Ocwen. This testimony was specific on the problems
with Ocwen software and account reconciliation.
We contacted this consultant for comment and were informed that because of an
Injunction granted to Ocwen he could not discuss the matter, and was prevented
from testifying in another case in which he was listed as a witness and the
jury awarded the plaintiff $11.5 Million in damages in Davis V. Ocwen. However
a hearing was being set to Vacate the Injunction that prevented the consultant
from discussing the details of his work at the company.
Other former and current employees have confirmed this information and noted
that Management has been aware of these issues at the highest levels inside the
company. Two employees have even tried to get the company to take action to
resolve the problems but have not been successful.
WOW. If the company is aware of these problems why haven’t they done something
to fix it?
Ocwen has not responded to these specific issues yet but has commented and
currently claim that they are not intentionally foreclosing on homes. The CEO
William Ereby has stated publicly that the company doesn’t make money on
foreclosures that their profit comes from servicing the loans themselves.
If this is true then why are their an overwhelming number of reports freely
available on the internet that confirm the Mr. Smith experience with the
company?
Why are there so many lawsuits pending against Ocwen?
Next month we will continue this series on Ocwen and report on Mr. Jones a very
unusual Ocwen customer.