Nature seems to have given the biggest, meanest beasts pretty thick skins. Presumably, this is so they can savage their victims without being hurt themselves. Of course, these beasts were also endowed with a brain the size of a walnut, which didn’t help their dispositions. Between their thick skin and slow synapses, these monsters usually made fast and furious work of their smaller prey.
However, based upon recent reports [which may or may not be true] it appears that one of these Darwinian features – a thick skin – does not carry over to the biggest and meanest of servicers, Ocwen Loan Servicing. Instead, we are learning that it is apparently thin skinned – at least when it comes to being vilified.
The jury is still out on whether Ocwen’s brain is larger than a walnut, but the smart money is betting that it’s not.
It seems that of late, lawyers and others are reporting that when Ocwen settles a claim made against it – e.g. by offering money or some other form of relief – the company, being the sensitive beast it is, insists that the plaintiff agree never to say anything bad about it in the future. So for all these years we’ve thought that Ocwen, like Godzilla, enjoyed trashing its own reputation by gobbling up hapless homeowners; we now learn that there is a softer side of the servicer!
Here is how I imagine the settlement discussions going in the glass enclosed conference room high atop some skyscraper in New York City:
Ocwen Attorney: “Alright, alright, alright! We’ll pay your client $150,000 in damages, but we’re not going to admit we did anything wrong!”
Consumer Attorney: “Hmmm. Well if you didn’t do anything wrong, why would you pay us anything? Ocwen’s got the money to drag this out forever.”
Ocwen Attorney: “I didn’t say we didn’t do anything wrong. Of course we did things wrong; we offered your client a modification but then slow-walked the process for over a year until she finally gave up. We lost her paperwork; denied receipt of her faxes; told her we had submitted the loan mod to underwriting when we hadn’t; offered mod terms that we later denied having made; and we generally toyed with your client, like a cat with a mouse, for 14 months until she retained you to sue us. I just said that as a part of any settlement, we weren’t going to ‘admit’ any wrongdoing. This is a common settlement condition we impose, even though it is patently false. Everybody knows it. Welcome to the alternative universe of Big Bank settlement agreements….”
Consumer Attorney: “I see. Do you have any other terms I should know about, before discussing your settlement proposal with my client?”
Ocwen Attorney: “Yes, as a matter of fact, we do. We insist on your client agreeing that she will never make any statements, either orally or in writing, that would tend to cast Ocwen in a bad light.”
Consumer Attorney: “But Ocwen’s reputation is already in the tank. How could my client do or say anything worse than what Ocwen has already done to itself? How about if we agree that she won’t say anything that will tend to cast Ocwen in a worse light? Your request is about the same as asking my client to agree that Lance Armstrong isn’t a liar or Bernie Madoff isn’t a cheat.”
Ocwen Attorney: “Counsel, you don’t get it do you? We’re not saying she has to say anything “nice” about Ocwen. She just can’t say anything bad. Besides, we’re not so stupid as to think that anyone would believe anything “nice” about Ocwen. It would be like describing a scorpion as “friendly.”
Consumer Attorney: “What ever happened to ‘Sticks and stones may break my bones, but names will never hurt me’? Since when did Ocwen suddenly become sensitive to being regarded as the schoolyard bully? I thought it relished that reputation, so banks would sell it billions of dollars of servicing rights, knowing that Ocwen would pick the bones clean. Mother Nature didn’t make vultures pretty for a reason, but it never seemed to bother them.
Ocwen is a non-bank servicer – it doesn’t own the loans – it just services them. So when the Big Banks were being sued by the government for servicing abuses, they simply off-loaded their loans to Ocwen, who continued the same abuses. Now when it ends up getting mauled in court for all of its shenanigans, it merely passes a portion of the bill on to the prior servicers. There is no real incentive for Ocwen to stop acting like the carrion eater it is.”
Ocwen Attorney: “I can see you’re enjoying this repartee. I agree this condition seems a bit unusual – like Genghis Kahn going to sensitivity training. Apparently, some of our execs felt that as bad as our reputation is, we should try to improve it.
I personally don’t agree. Ocwen’s share price has actually improved as its reputation has crumbled. If I was running the railroad, I’d insist in our settlement agreements that the victims continue bad-mouthing us. So far, it’s been good for business.”
