April 5, 2013:
Although Ocwen states that it is complying with all requests by regulators, it also notes in its 10-K form that the CFPB, along with the state Attorneys General involved in the settlement and the Multi-State Mortgage Committee, have asked Ocwen to contribute to a consumer relief fund. The servicer declined.
Ocwen is the largest of the mortgage servicers, so it’s not surprising that they are being squeezed first. It is also not unexpected because these companies are servicing a large portion of existing mortgages. Despite the company’s assertion that it is against forking over any contributions, Ocwen acknowledges that it may be liable for up to $135 million under the proposal. The servicer also concedes that its reluctance to pony up may end it in a court of law. Ocwen also reported that it had received two civil investigative demands from the Dept. of Justice regarding its new acquisition , Homeward Residential, seeking to resolve questions regarding that unit’s prior participation in the government’s Home Affordable Mortgage Program.
Ocwen certainly has its plate full, but the other servicers are likely to be next. If Nationstar and Walter also opt out of the consumer relief pool, there may well be a whole lot of legal action going on very soon in the mortgage servicing industry.