Ocwen issues apology letter to borrowers

by Rachel.Norvell28 Oct 2014
Ocwen Financial Corp., the largest U.S. nonbank servicer, said it was hiring an independent firm to investigate how the mortgage servicer had sent backdated letters to thousands of borrowers about loan modifications and foreclosures.

An investigation by the New York's Department of Financial Services found that Atlanta-based Ocwen Financial improperly dated the time-sensitive letters to mortgage borrowers and did not take action to fix the issue despite repeated notices of concern.

In the majority of cases, borrowers received a letter in the mail that denied mortgage loan modifications—letters that were dated more than 30 days before it arrived, wrote Benjamin Lawsky, superintendent of New York's Department of Financial Services, in a letter to Timothy Hayes, executive vice president & general counsel for Ocwen. Many borrowers of the lender also received foreclosure warning letters months after the deadline had already passed, according to Lawsky's letter.

Ocwen's Chief Executive Ron Faris wrote a letter to homeowners on Friday apologizing for the improperly dated letters, as well as to clarify what happened, what they’re doing  to address the issue and how they are “committed to keeping borrowers in their homes.”

"Historically letters were dated when the decision was made to create the letter versus when the letter was actually created," Faris wrote to borrowers. "In most instances, the gap between these dates was three days or less. In certain instances, however, there was a significant gap between the date on the face of the letter and the date it was actually generated."

Last Tuesday Ocwen had blamed the company’s correspondence systems for the improperly dated letters to at least 281 of its New York borrowers. The company said that it is investigating two other cases and cooperating with regulators. Ocwen amended the statement later that day to say it was aware of more borrowers in New York who were affected but did not know yet know how many.

Faris' letter on Friday did not mention how many borrowers had received such letters, but he added Ocwen believed its backup checks and controls had prevented any borrower from a foreclosure due to the improperly dated letters.