Federal consumer agency accuses major mortgage servicer of mishandling loans

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The survival of one of the nation's largest nonbank mortgage servicing companies was thrown into question Thursday as the company was hit with federal and state lawsuits, including a cease-and-desist order in MI, for allegedly failing borrowers with mistakes, shortcuts and other problems that cost some people their homes.

"Ocwen failed to properly recognize individuals as heirs, and thereby denied assistance to help avoid foreclosure", the CFPB claims.

Ocwen, the agency also said, allegedly was unable to send out accurate monthly statements or properly credit payments.

NEW YORK (AP) - State and federal authorities have sued mortgage servicer Ocwen Financial Corp., saying the company botched the handling of millions of mortgage accounts. Instead, the Tar Heel State claims, Ocwen submitted a plan that didn't include any of its liabilities, such as "known and anticipated" regulatory penalties and the implementation of a new servicing platform.

"Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes", CFPB Director Richard Cordray said.

It said the company would go after borrowers long before verifying whether the debt was valid, allegedly foreclosed illegally on at least 1,000 homeowners, and charged borrowers for add-on products without their consent.

In February, Ocwen reached a separate agreement with California regulators and agreed to pay more $225 million in refunds and loan forgiveness to Californians settling allegations that sloppy practices led to violations of state and federal mortgage rules over the last several years. The company failed to make good on pledges to improve its mortgage-servicing performance since agreeing to a multistate settlement in 2014, said Bondi, who added, "enough is enough". North Carolina's bank regulator said fixing some of the company's problems could put it out of business.

"Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment", the statement continued.

The company said the accusations by the federal agency are "inaccurate", "unfounded" and the result of a "self-serving conclusion".

Ocwen is one of the country's largest non-bank mortgage lenders, with a portfolio of almost 1.4 million loans and a balance of $209 billion. The frustrating and expensive experience of one consumer cited in the CFPB lawsuit illustrated the problems some borrowers confronted when dealing with Ocwen. The CFPB went after Ocwen in 2013, again alleging that the company had failed to services its loans improperly.

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