Ocwen: The Servicing Industry’s Corporate Piñata

Posted on by Phil Querin

BullyOcwen, the servicing industry’s version of a corporate piñata, is, once again, stealing the wrong kind of headlines.  In a November 8, 2014 article [“Firm Accused Of Illegal Practices That Push Families Into Foreclosure”] appearing on npr.org, here, the servicing behemoth is accused of – gasp! – gouging borrowers. No! Not Ocwen! How can that be?! Their motto is “Helping Homeowners Is What We Do.” 

Actually, the rumor is that when a bunch of Ocwen PR bigwigs got together at their annual Holiday Party and Drunkfest, they laughingly created a motto “Hurting Homeowners Is What We Do.”  But after sobering up and giving it more thought, they reluctantly changed the motto to what we see today.

But I digress….  Here is the gist of the NPR story:  It seems that a class action has recently been filed against Ocwen.  [I suspect that if they ever were to put the putative class members together, it would fill Michigan Stadium.] One of the lead plaintiffs, Phyllis Nugent, lives with Chad Hopkins and their two children in Lewiston, Illinois.

He’s a roofing contractor. She’s a nurse. And the couple says they’ve always made their mortgage payment — at least until things went haywire back in 2011.

They bought the house in 2002 for about $100,000. Chad Hopkins says they could afford that. “We’ve lived here 12 years. We’ve raised our two daughters here along with two of Phyllis’ sons,” he says. “Not only have we lived here and paid our bills, we have dumped a bunch of money into this place.”

But then in 2011, Ocwen discovered that there’d been a paperwork mix-up where some property taxes hadn’t been paid a number of years back.

The rest of the story is like reading something out of Franz Kafka.

Documents show that Ocwen then added fees and demanded a lump sum payment of $18,000.The couple says they couldn’t pay that. And they say they couldn’t tell how much of that was taxes and how much was fees tacked on by Ocwen.

At that point, Ocwen refused to accept their normal monthly payments. And Nugent says the company started charging them additional fees that didn’t seem to make any sense.

“They charged us fees for property preservation” when the couple was clearly still living in the house and taking care of it, she says. And Nugent says Ocwen also charged them for “force-placed insurance when we always paid our insurance with my insurance man that I’ve had since 1996.”

When taken all together, these fees were not small. In fact, Ocwen claims the couple now owes more than they borrowed in the first place. They borrowed $98,000. But an Ocwen bill cited in the lawsuit claims the couple now owes $150,000 despite a decade of making their mortgage payments.

Meanwhile, Ocwen is now moving to foreclose on their house. “Oh, yeah,” Hopkins says, “they’ve sent foreclosure notices and they’ve filed here at the federal courthouse in Peoria, Ill.”

And of course, the coup de grâce, which Ocwen pulls out of its Bag-O-Tricks when it gets especially tired of dealing with persistent customers; they offload them to a call center in India.

When they’d call to try to sort all of this out, Nugent and Hopkins say, Ocwen routed them to a call center in India. They say they couldn’t get their questions answered. And they were told to just pay the bill.

Hmmm.  Here’s my take: Ocwen will go public, recant, say it was all a huge clerical error, the lackey has been dismissed, and announce that they’ve assigned an Extra-Special Super-Deluxe English-Speaking Point-of-Contact to the couple, who will promptly make everything right. Problem solved. Next!

Posted in Financial Crisis, Foreclosure, Miscellany, Q-Rants, Servicers | Tagged ,
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