Ocwen hit by shareholder class action

by Adam Smith19 Aug 2014
A major mortgage servicing firm has been hit by a shareholder class action suit.

Shareholder rights law firm Robbins Arroyo has announced the filing of a federal securities fraud class action against Ocwen. The suit was filed in the U.S. District Court for the Southern District of Florida, and alleges that the company and some of its officers and directors violated the Securities Exchange Act of 1934 between May 2, 2013 and August 11, 2014.

Ocwen has been accused of charging $65 million in questionable fees to homeowners. The lawsuit relates to Ocwen's involvement with Altisource Portfolio Solutions, S.A., as well as the involvement of the officers and directors, specifically Chairman William C. Erbey, in approving transactions with Altisource relating to the forced placed insurance that funneled $65 million in fees from distressed homeowners.

The complaint alleges the company made false and misleading statements, failed to disclose that Altisource was charging exorbitant fees to Ocwen to aid in funneling the questionable fees to homeowners and that Erbey was involved in approving transactions with which he had a conflict of interest. It also accuses Ocwen of failing to comply with laws and regulations designed to protect homeowners, and says the company's financial statements were artificially inflated and did not present a fair representation of Ocwen's finances or operations.


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