Ocwen Financial Corp. has denied accusations made by a group of major mortgage bond investors that the company’s practices created defaults on mortgage bonds backed by debt-it oversees.
“Ocwen denies that there is any basis for a default under the Trust agreements, and it will respond at the appropriate time,” according to a letter sent by Richard Jacobsen on behalf of Ocwen to the attorney representing the bondholders.
Investors owning at least 25% of voting rights for 119 mortgage-backed securities deals sent a formal notice of non-performance to Ocwen and trustees alleging improper loan modification practices, wrongfully recouped advances and a failure to account for cash flows. The group includes BlackRock, MetLife and Pimco.
The notice also stated Ocwen steered work to affiliates such as Altisource Portfolio Solutions and Home Loan Servicing Solutions for allegedly unnecessary, or overpriced, mortgage servicing to the detriment of the trusts, investors and borrowers.
“Your letter obscures the ultimate objective of your investor clients: to stop servicers from modifying loans and force them to foreclose on, and evict, as many struggling homeowners as quickly as possible,” Ocwen also wrote in the letter.
“While knee-jerk foreclosures may redound to the special economic interests of your clients, they are not in the best interests of the trusts as a whole, not consistent with industry practice and therefore prohibited under the servicing agreements.”
Ocwen added that the letter sent by the investors “was drafted in an inflammatory tone, with misleading content, and coordinated with media release so as to create wildly false impressions.”
Click here to read the full letter.