CFPB sues Ocwen, alleges total failure of mortgage servicing process

Ocwen is still repeated offenders. When are the execs and board members get charged???

April 20, 2017 is turning into D-Day for Ocwen Financial.

On Thursday, a group of state banking regulators issued a series of cease-and-desist orders to Ocwen that prohibit the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing, a subsidiary of Ocwen, until the company is “able to prove it can appropriately manage its consumer mortgage escrow accounts.”

But that’s only one front. Ocwen now has a much bigger fight on its hands – with theConsumer Financial Protection Bureau.

The CFPB announced Thursday that it is suing Ocwen Financial for “failing borrowers at every stage of the mortgage servicing process.”

According to the CFPB, its lawsuit alleges that Ocwen cost borrowers money, and in some cases, their homes, with its years of “widespread errors, shortcuts, and runarounds.”

In its lawsuit, the CFPB says that Ocwen “botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

The lawsuit also claims that also “illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.”

The CFPB claims that it uncovered “substantial evidence that Ocwen has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.”

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CFPB fines Experian $3 million for lying about consumers’ credit scores

Experian, one of the nation’s three major credit reporting bureaus, misled consumers by telling them that the credit scores they purchased from the company were the same ones that lenders used to make credit decisions, the Consumer Financial Protection Bureau said Thursday.

And for that deception, the CFPB is fining Experian $3 million.

According to the CFPB, Experian developed its own proprietary credit scoring model, which it calls the “PLUS Score.” Experian then took that “PLUS Score” and applied it to information in consumer credit files to generate a credit score it offered directly to consumers.

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Nationstar facing CFPB fine over HMDA violations

Nationstar Mortgage is facing a fine from the Consumer Financial Protection Bureau over the nonbank’s alleged failure to comply with the reporting requirements of the Home Mortgage Disclosure Act, the company revealed Thursday.

Nationstar disclosed the potential fine in its 10-K filing with the Securities and Exchange Commission.

In the filing, Nationstar said it is “currently in negotiations with the CFPB regarding the payment of civil monetary penalties for the alleged failure to comply with the reporting requirements of the Home Mortgage Disclosure Act.”

The Home Mortgage Disclosure Act, referred to as HMDA, was originally enacted in 1975 and requires many financial institutions to collect data about each company’s housing-related lending activity.

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Ocwen SEC filing reveals details of CFPB mortgage servicing investigation

During a call with investors to discuss the company’s fourth-quarter earnings, Ocwen Financial CEO Ron Faris said resolving the Consumer Financial Protection Bureau’s investigation into the company’s mortgage servicing practices is a top priority in 2017.

In Ocwen’s third-quarter 10-Q filing with the Securities and Exchange Commission, the company revealed that it could be facing a fine and/or other disciplinary action from the CFPB.

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Court: CFPB Has Authority To Request Seven Years’ Worth Of Foreclosure Documents

Back in November, the Consumer Financial Protection Bureau filed a lawsuit against one of the nation’s largest providers of seller-financed homes after it failed to comply with a subpoena to turn over documents related to home foreclosures. This week, a judge upheld the Bureau’s authority to request the documents from Harbour Portfolio Advisors. 

A Federal District Court in Detroit issued a 12-page decision [PDF] directing Dallas-based Harbour Portfolio Advisors to comply with the CFPB’s request for documents and other information related to its investigating into housing finance.

The case against Harbour began back in Sept. 2016 when the CFPB began looking into whether financing offered by the company and others like it — referred to as an “Agreement for Deed” — were in violation of federal leading laws.

An Agreement for Deed is a written agreement to purchase a residential property, where the seller agrees to deliver a deed to the purchaser upon full payment of the purchase price.

This so-called rent-to-own policy, the New York Times reports, became popular during the housing crisis when it was difficult for consumers to obtain mortgages and alternative lenders stepped in to fill the gaps.

Harbour Portfolio bought nearly 7,000 properties from Fannie Mae after the housing crisis, paying roughly $10,000 or less for each, the New York Times found in an investigation. The company then turned around and sold the properties “as is” at a rate four or five times higher than the purchase price.

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It’s confirmed: CFPB doesn’t need to follow Trump’s executive order on regulations

The Office of Information and Regulatory Affairs finally put to rest questions around the requirements of independent agencies under President Donald Trump’s recent presidential memorandum and executive order.

The uncertainty surrounded the impact of the EO on the future of regulations across all industries.

Dominic Mancini, acting administrator of the OIRA, put out a memorandum giving interim guidance on implementing Trump’s executive order on Jan. 30 titled “Reducing Regulation and Controlling Regulatory Costs.”

The memorandum, which gives a list of questions and answers, includes the question, “Do Section 2’s requirements apply to significant regulatory actions of independent agencies?”

The short answer: no.

From the memorandum:

No, the requirements of Section 2 apply only to those agencies required to submit significant regulatory actions to OIRA for review under EO 12866. Nevertheless, we encourage independent regulatory agencies to identify existing regulations that, if repealed or revised, would achieve cost savings that would fully offset the costs of new significant regulatory actions.

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Here’s a snapshot of the CFPB monthly mortgage complaints

(Source: CFPB)

(Source: CFPB)

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Rep. Hensarling plan for drastic overhaul of CFPB and Dodd-Frank revealed?

A new memo about future plans reportedly from House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, reveals an even more aggressive version of the Financial CHOICE Act, the Republican-led effort to repeal and replace Dodd-Frank, with the Consumer Financial Protection Bureau facing some of the most drastic changes, according to an article in CNBC by Ylan Mui.

The article stated that the memo shows Hensarling is strengthening his attack on the CFPB and scaling back regulations on bank living wills and stress tests in new legislation, which is expected to be introduced soon.

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Court denies Democrats’ push to defend CFPB

The D.C Circuit panel on Thursday denied all three motions to intervene in thelandmark case between the Consumer Financial Protection Bureau and PHH.

The case, which is waiting for a final decision on the CFPB’s petition for rehearing en banc, received three additional motions over the last couple weeks from Democratic state attorneys general, Senators,  and consumer advocacy groups, who were attempting to intervene on behalf of the CFPB.

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Senate Republicans unveil bill to replace CFPB director with committee

While the Consumer Financial Protection Bureau, with the support of top Democratic Party leaders and 17 Democratic state attorneys general, is fighting in court to defend its leadership structure, a Republican-led effort in the Senate could render the legal battle over the CFPB a moot point.

On Tuesday, Sens. Deb Fischer, R-Nebraska; John Barrasso, R-Wyoming; and Ron Johnson, R-Wisconsin, introduced a bill that would replace the single director of the CFPB with a five-member bipartisan committee, a change the Republican Party has long pushed for.

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