Ocwen is certainly bad news…Keep your eye on Ocwen and other non-banks, Mr. Lawsky…
[Update: Ocwen statement added at 12:24 p.m. ET.]
New York Department of Financial ServicesSuperintendent Benjamin Lawsky alleges that Ocwen Financial (OCN) has been backdating potentially hundreds of thousands of letters to borrowers “likely causing them significant harm.”
Ocwen has been in Lawsky’s crosshairs since February, when it put a $2.7 billion mortgage servicing rights deal between Ocwen and Wells Fargo (WFC) on an indefinite hold.
“In the course of the Department’s review of Ocwen’s mortgage servicing practices, we have uncovered serious issues with Ocwen’s systems and processes, including Ocwen’s backdating of potentially hundreds of thousands of letters to borrowers, likely causing them significant harm,” Lawsky says in the open letter to Ocwen general counsel Timothy Hayes, a copy of which was sent to HousingWire.
Ocwen issued the following statement to HousingWire.
“We deeply regret the inconvenience to borrowers who received improperly dated letters as a result of errors in our correspondence systems,” a spokesperson for Ocwen said. “As always, our goal is to avoid foreclosure. In the case of the 283 borrowers in New York who received letters with incorrect dates, 281 are currently borrowers with us. We are continuing to review the rest of the cases.”
A full copy of the Lawsky letter can be read here.
“In many cases, borrowers received a letter denying a mortgage loan modification, and the letter was dated more than 30 days prior to the date that Ocwen mailed the letter,” Lawsky writes. “These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter.
“In other cases, Ocwen’s systems show that borrowers facing foreclosure received letters with a date by which to cure their default and avoid foreclosure – and the cure date was months prior to receipt of the letter. The existence and pervasiveness of these issues raise critical questions about Ocwen’s ability to perform its core function of servicing loans.”