Tag Archives: mortgage servicers

Massachusetts sues Ocwen for “abusive” mortgage servicing practices

Ocwen fought back against Massachusetts’ regulations, asking a court to restrain the state’s cease and desist order because it would “cause significant harm” to its customers in the state.

But, the Division of Banks isn’t the only Massachusetts governmental entity that is now targeting Ocwen.

Recently, Massachusetts Attorney General Maura Healey announced that the state is suing Ocwen for widespread “abusive” mortgage servicing practices.

According to Healey’s office, Massachusetts’ lawsuit claims that Ocwen charged homeowners in the state for “unnecessary and expensive force-placed insurance policies, imposed excessive fees on delinquent borrowers, and failed to properly process escrow and insurance payments.”

Massachusetts’ complaint also claims that Ocwen failed to respond to borrower disputes about their accounts and to correct account errors.

Healey’s office alleges that Ocwen’s “servicing failures” increased Massachusetts’ borrowers’ mortgage and insurance payments, put borrowers at risk via lapses in insurance, and pushed borrowers into delinquency and foreclosure.

According to details from Healey’s office, Ocwen “has consistently fallen short” in its servicing operations in a number of ways, including (charges directly from Healey’s office):

  • Funneling fees and commissions: Ocwen arranged for commissions and other fees to be paid to companies related to Ocwen, even though those companies did little or no work, resulting in higher charges to Massachusetts borrowers
  • Improperly administering insurance premiums: Ocwen failed to disburse borrowers’ escrowed insurance premiums to insurers, causing their insurance policies to lapse, leaving them exposed to serious gaps in insurance coverage. The force-placed policies that Ocwen then puts in place are very expensive, carry high deductibles, and do not provide critical liability and personal property coverage
  • Unnecessary flood insurance: Ocwen force-placed borrowers in expensive flood insurance policies for time periods when properties were not in special hazard flood area and did not require flood insurance
  • Duplicative insurance policies: Ocwen force-placed certain borrowers who already had insurance coverage, either through their own homeowners’ insurance or through other policies that Ocwen itself had acquired on behalf of the borrowers
  • Charging inflated and duplicative default-related fees: Ocwen took advantage of struggling borrowers by ordering unnecessary and duplicative title search, property inspection and landscaping services and then passing the costs on to the borrower

Healey’s lawsuit also accuses Ocwen of overcharging borrowers and failing to give them the necessary information to understand or dispute inappropriate charges.

Read on.

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Citigroup to exit U.S. mortgage servicing operations by 2018

Citigroup Inc (C.N) said on Monday it would speed up the transformation of its U.S. mortgage business by exiting servicing operations by the end of 2018.

Citi said it would sell its mortgage servicing rights on about 780,000 Fannie Mae and Freddie Mac loans of non-Citibank retail customers to New Residential Mortgage LLC (NRZ).

The remaining Citi-owned loans and other mortgage servicing rights not sold to NRZ are expected to be transferred to loan servicing provider Cenlar FSB [CENLR.UL] in 2018.

The lender said it expected these deals to hurt first-quarter pretax results by about $400 million, including a loss on sale and certain related transaction costs.

The move is intended to simplify CitiMortgage’s operations, reduce expenses and improve returns on capital as the company focuses on mortgage originations.

Read on.

PHH takes another hit as BofA Merrill Lynch pulls mortgage servicing portfolio

It only took a little more than six months for Bank of America Merrill Lynch to decide to pull the rest of its mortgage servicing business from PHH Mortgage Corporation, marking another devastating blow for the company.

PHH Mortgage, a wholly-owned subsidiary of PHH Corp., announced in an 8-K filingwith the Securities and Exchange Commission that it received written notice from Bank of America that it is terminating its agreement with PHH, meaning the company will no longer provide private label origination services on behalf of Merrill Lynch, effective March 31, 2017.

Read on.

Mortgage-servicer faces allegations of foreclosure fraud

ORDOVA, TN (WMC) –

A Shelby County Circuit Court lawsuit and government records revealed a pattern of fraud allegations against mortgage-servicing company Nationstar Mortgage.

The WMC Action News 5 Investigators launched an investigation of the Dallas-based mortgage-servicer after it foreclosed on the Cordova, Tennessee, home of Linda Howard. Howard and her husband had owned the home since 1998. Her attorney Kevin Snider produced records that proved Howard never missed a payment since Nationstar Mortgage started servicing her mortgage in 2011.

Also according to the records, Nationstar Mortgage suddenly started refusing her monthly payments in February of this year. From February to May, the company sent her payments back with statements posting thousands of dollars in unexplained fees like “property inspections” and “disbursement insurance.”

“I wrote them. I called them. And I got no response,” Howard said.

Snider said Nationstar Mortgage kept returning Howard’s payments and kept ignoring her requests for explanation of the fees until it foreclosed on her house in May, then sold it at auction. “Nationstar improperly foreclosed on the property,” Snider said.

Read on.

Ocwen fixes previous settlement failures, faces two new failed tests

Right as Ocwen Financial fixed previous compliance failures, the servicer is hit with two new compliance failures, according to the latest oversight report on Ocwen from the office of Joseph Smith, who is the monitor of the National Mortgage Settlement.

In the last report from the NMS, Ocwen failed to be back in compliance with one of the performance metrics of the National Mortgage Settlement that it failed in the second half of 2014. And because of those issues, Ocwen had to place 17,300 loans that “could have been affected” by this issue on foreclosure hold.

These issues are now resolved, according to the latest report.

Smith’s office permitted Ocwen to lift the foreclosure sale hold in July 2016 after it mailed corrected loan modification denial notices to affected borrowers and provided a sufficient timeframe for the borrower to appeal the denial.

Read on.

$2.8 billion in Fannie Mae, Freddie Mac mortgage servicing rights up for sale

Mortgage servicers looking to get their hands on some Fannie Mae and Freddie Macmortgage servicing rights have that opportunity, as $2.8 billion in Fannie and Freddie MSRs just hit the market.

According to MountainView Servicing Group, which is acting as the exclusive sale advisor, the portfolio features the mortgage servicing rights on 12,713 loans with an average loan size of $223,765.

Read on.

HSBC yanks massive PHH mortgage servicing portfolio

It appears that PHH Corp. has a subservicing problem on its hands, as for the second time in four months, the company is about to lose a large portion of its mortgage subservicing portfolio.

PHH disclosed Thursday that it recently received notice from HSBC Bank that it plans to sell the mortgage servicing rights on approximately 139,000 mortgage loans currently subserviced by PHH Mortgage Corporation, a wholly-owned subsidiary of PHH, on behalf of HSBC.

In an 8-K filing with the Securities and Exchange Commission, PHH said that HSBC informed the company that the purchaser of the mortgage servicing rights does not plan to continue using PHH as a subservicer.

PHH said that the portfolio of loans it’s set to lose subservicing rights for represents approximately 29% of the company’s total subservicing portfolio units, as of June 30, 2016.

Read on.