Regulators prepare to crack down on servicers

by Ryan Smith13 Nov 2014
Regulators are preparing to crack down on some of the largest nonbank mortgage servicers after doubts about liquidity and homeowner complaints about unauthorized fees and improper foreclosures.

State and federal regulators are shortening the leash on the three largest nonbank servicers, including the embattled Ocwen Financial Corp., according to a Bloomberg report. State authorities plan to recommend standards on liquidity, capital and corporate governance next month, while the Federal Housing Finance Agency says it will set new risk management guidelines by Dec. 1.

Ocwen, Nationstar Mortgage Holdings and other nonbank servicers handle payments for about 15% of home loans across the country, according to Bloomberg. But a study by the FHFA’s inspector general said many servicers showed “warning signs” of financial weakness, and regulators worry that some companies may not have the liquidity to withstand financial setbacks.

Meanwhile, the New York Department of Financial Services is investigating Ocwen and Nationstar for allegations that they’ve mishandled loan modifications. Ocwen, accused of backdating letters to thousands of struggling homeowners, is preparing to settle claims against it for as much as $100 million.

COMMENTS

  • by | 11/13/2014 10:56:35 AM

    WHAT ABOUT THE BIG BANKS LIKE THE ONE THAT SET ME UP TO FAIL, WITH SUBSTANCIAL EQUITY AND 24 YEARS IN MY HOME AND I OWNED MORE OF THE GD HOUSE THAN WELLS FARGO DID AND DONT FORGET FREDDIE MAC MY LENDER. THE SONG CAUGHT IN THE CROSSFIRE BY SRV COMES TO MIND. WHATS BEING DONE ABOUT THE "TOO BIG TO FAIL ''BANKSTERS" YOU KNOW THE ONES THE STEP DOWN ATTY GENERAL ERIC HOLDER WAS TALKING ABOUT, WHAT HAPPEND TO THAT ?????????? C'MON LETS KEEP IT FAIR FOR THE "FAIR HOUSING LENDERS" "ARE YOU KIDDING ME" :/ THANKS WELLS FARGO, THANKS FREDDIE MAC, THANKS OBAMA, THANKS GOV.OF VA, THANKS ATTY GENERAL OF VA. YOUR POWERLESS EVIDENTLY AGAINST THE BANKSTERS WHO DESTROYED OUR ECONOMY AND MY LIFE. I AM 54 FEMALE, SINGLE AND HOMELESS AND ITS FUKN COLD AND WINTERS GONNA BE A CHALLENGE. THAT LOAN MODIFICATION TEASER WAS A REAL KICK IN THE FACE. THEY STOLE MY HOUSE OF 24 YEARS WORTH $200,000. AND I OWED LESS THAT $100,000. AND THEM DAWGS SOLD MY HOUSE ON THE COURTHOUSE STEPS IN NON-JUDICIAL VIRGINIA FOR $75,000. TO A PRIVATE INVESTER. WTF !!!!! ????? FURIOUS IN VIRGINIA MY HOME TOWN. THANKS FOR LEAVING ME FOR DEAD. NO FUNDS TO HELP CALLED ALL THE HOUSING VOUCHER PEEPS AND ALL I HERE IS NO FUNDS AVAILABLE TRY BACK LATER MAAM HOPE YOU DONT FREEZE TO DEATH THIS WINTER. YEAH RIGHT!

  • by Brian Mahany | 11/13/2014 8:25:20 PM

    Great story!

    Insiders with original source information about fraud by servicers may qualify for rewards under the Federal False Claims Act or FIRREA. The FIRREA statute caps awards at $1.6 million, whereas there is no cap under the False Claims Act. Whistleblowers can earn up to 30% of whatever the government collects from the wrongdoers. (Typical awards are 15-20%).

    There must be a fraud or loss to a government sponsored program. That means residential mortgages are covered if insured by Fannie, Freddie or the FHA.

    If you work or worked at a servicer, we would love to speak with you. We bring actions on behalf of the United States.

    Brian Mahany, attorney

  • by Exhausted and cold in Oregon | 11/13/2014 9:52:46 PM

    I would like to know where, either Wells Fargo or American Servicing applied the $89,000 of trial payments I made over 4 years...in 6 different Modification plans. I finally gave up trying to work with them. Refused to be sucked into yet another trial period. Sending them another ream of the same paperwork over and over again (It seems papers were frequently misplaced & needed to be sent again). After my 6th attempt, I received another round of letters with "stamped" signatures, I gave up and moved out with what I could carry. Bank Foreclosed a year later and my home of 19 years went to Auction. Auction results? No show...so Bank bought. Sale Price 3/4 more than the remaining balance. What Accounting Regulator are they trying to fool? Disclosure simply said Principal Balance. Unpaid Interest from 2006 (due to non- payment. Again, not true. Made years & years of trial payments), Lenders Fees (without disclosure/breakdown as to what these fees might be) and what appeared to be reasonable legal fees. NO WHERE does it show a credit back for the trial payments. It should have at least been credited to the outstanding Interest? I spoke to Trustee Attorney. He seemed to think I had a case but, said I needed to hire an Attorney. WITH WHAT??? I spent all of my time. money and energy trying to save my home through the Modification. Wells Fargo clearly never had any intention of Modifying my Mortgage. Trial payments seem to have been applied to a mysterious Suspense Account. How many millions are in THAT account??? Is there a Class Action I can participate in???? I there isn't, there should be.
    In the spirit of Dodd & Frank and all the Disclosures and new regulations. it seems that Lenders are exempt and not accountable.

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