Ocwen slapped with penalty for improper foreclosures

by Ryan Smith08 Aug 2019

Ocwen Financial Corporation will refund or credit attorney’s fees to two dozen Maine borrowers following the state’s determination that the services pursued improper foreclosures against the homeowners.

Ocwen will refund or credit $50,000 in attorney’s fees that the homeowners were assessed when their homes were foreclosed upon. The servicer will also pay $24,000 in civil penalties and $10,000 in investigative costs to the state.

As part of a consent agreement with the Maine Bureau of Consumer Credit Protection and the state attorney general, Ocwen admitted that it had pursued foreclosures against Maine homeowners that the state found to be legally defective. 

According to the Bureau of Consumer Credit Protection, Ocwen used powers of attorney granted by “corporate originators” of the mortgages in question. However, those corporate originators had ceased to exist, all of them having been legally dissolved no later than 2012. The state maintained that the powers of attorney were terminated when the granting corporations dissolved.

Ocwen, however, continued to use the powers of attorney “from legally non-existent entities” to pursue the foreclosures, according to the Bureau of Consumer Credit Protection. The company’s illegal filings continued into January of this year – after Ocwen’s lawyers had promised Maine regulators that the practice would cease.

Ocwen’s pursuit of the foreclosures violated state statutes against “false, deceptive or misleading representation or means in the collection of any debt,” the Bureau of Consumer Credit protection said.

“The consent agreement puts Ocwen and other national mortgage lenders and servicers on notice that they must follow the legal standards here in Maine if they pursue actions on defaulted mortgages,” said Maine Attorney General Aaron M. Frey.

The consent agreement may have ramifications beyond Ocwen, since other lenders may be filing foreclosures based on similar powers of attorney granted by now-nonexistent corporate originators, according to the Bureau of Consumer Credit Protection.