Ocwen Woes Continue as CEO Pens Apology to Borrowers

Amid an ongoing investigation by the New York Department of Financial Services (DFS) into the servicing practices of Ocwen Financial Corporation (NYSE: OCN), the company has issued an apology to any homeowners who may have been affected by misdated letters regarding foreclosure or loan modification.

In an open letter dated Friday, Ocwen CEO Ron Faris apologized for letters the company inadvertently misdated and sent to borrowers and how the issue is currently being addressed. 

“At Ocwen, we take our mission of helping struggling borrowers very seriously, and if you received one of these incorrectly-dated letters, we apologize,” Faris wrote. “I am writing to clarify what happened, to explain the actions we have taken to address it, and to commit to ensuring that no borrower suffers as a result of our mistakes.”

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Historically, Ocwen dated letters upon the decision to create the letter rather than when the letter was actually created. While in most instances, the gap between these dates was three days or less, in some cases there was a significant gap between the date on the face of the letter and the date it was actually generated.

“We are continuing to investigate all correspondence to determine whether any of it has been inadvertently misdated; how this happened in the first place; and why it took us so long to fix it,” Faris wrote. “At the end of this exhaustive investigation, we want to be absolutely certain that we have fixed every problem with our letters.”

As part of Ocwen’s efforts in remedying the situation, it has hired an independent firm to investigate and ensure that all the “necessary fixes” have been made. The company also said it will engage with its 15 nationally recognized community advocates and housing counsellors to receive additional guidance on making things right for borrowers who may have been affected by the error.  

“We recognize our mistake,” Faris stated. “We are doing everything in our power to make things right for any borrowers who were harmed as a result of misdated letters and to ensure that this does not happen again. We remain deeply committed to keeping borrowers in their homes because we believe it is the right thing to do and a win/win for all of our stakeholders.”

Under the company’s current process, no borrower undergoes foreclosure without a thorough review of his or her loan file by a second set of eyes, Faris noted. Additionally, he encouraged borrowers that Ocwen accepts appeals for modification denials whenever it receives them and will not begin foreclosure proceedings, or complete a foreclosure, that is underway without first addressing the appeal.

The non-bank mortgage servicer—and parent of Liberty Home Equity Solutions’ reverse mortgage origination platform—has been under regulatory fire much of this year, most notably from the New York DFS for allegations regarding the company’s servicing practices, including the misdated letter debacle.

Last week, Standard & Poor’s downgraded Ocwen for its servicing capabilities, both as a primary servicer of subprime mortgages and as a special servicer of residential mortgages—the most recent downgrade following a similar one from Moody’s Investors Service in September.

To address its heightened regulatory attention, Ocwen has continuously pledged that it is cooperating with the DFS as well as all regulatory agencies looking into its operations. 

Concluding the apology, Faris indicated Ocwen will further communicate with borrowers on developing matters in addressing the letter issue.  

Written by Jason Oliva

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  • It will be very hard for such poor practices not to become another black eye not only for Liberty but for our little industry as well.

    When dates are so sensitive as to defaults and foreclosure, one would expect few mistakes certainly not a pattern of such mistakes. This shows not only a lack of care for borrowers and the reputation of the industry but also a lack of internal control in one of the most sensitive areas in the mortgage business.

    Ocwen management has not only demonstrated greed in selection of subservice providers but also in its attempt at cost savings through negligent supervision. Ocwen seems to be the banner for borrower mistrust of their servicers.

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