Yearlong probe clears Ocwen of servicing violations

by Ryan Smith26 May 2016
Ocwen Financial has been cleared of wrongdoing after being accused by investors of violating its duties as a mortgage servicer.

Last year, a group of investors that reportedly included MetLife, Pimco and BlackRock accused the servicer of failing to properly collect payments on $82 billion in home loans, according to a HousingWire report. The investors accused Ocwen of costing them $26 billion in cashflow.

In January of 2015, law firm Gibbs & Bruns, which represents the investors, sent a letter to Wells Fargo, the deals’ master servicer, alleging that “Ocwen has failed to perform, in material respects, its contractual obligations as servicer and/or master servicer.”

Ocwen strongly denied the accusations, calling the investors’ charges baseless and saying that investors were really trying to force more foreclosures to line their own pockets.

“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 responded to Gibbs & Bruns.

Ocwen also claimed that investors tried to pressure the company into speeding up its foreclosure timelines, HousingWire reported. That would be in direct violation to restrictions that financial regulators, including the Consumer Financial Protection Bureau, had placed on the servicer.

Wells Fargo initiated an independent investigation. After a yearlong probe, the investigators found no evidence to back up the allegations made by Gibbs & Bruns on behalf of the investors, HousingWire reported.

“From day one, we knew that an independent review of the facts would confirm that Ocwen serviced, and continues to service today, loans in accordance with its contractual obligations,” Ocwen president and CEO Ron Faris said in a statement.

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