Banking

CFPB appeals Ocwen’s victory in servicing suit

The Consumer Financial Protection Bureau has filed an appeal in its lawsuit against Ocwen Financial after a federal judge dismissed servicing misconduct claims dating back to the 2008 financial crisis.

The CFPB filed the appeal late Wednesday after all claims against Ocwen were dropped in a case in the U.S. District Court for the Southern District of Florida. Judge Kenneth Marra had ruled that nine of the 10 claims filed by the CFPB in a 2017 lawsuit were barred by the 2014 national mortgage settlement and the tenth claim was dismissed by the court.

Ocwen had alleged that the CFPB was bound by the terms of the settlement and the court agreed.

Ocwen declared victory and has vowed to fight any appeal.

“Ocwen will continue to vigorously defend itself, as we have done throughout the course of this litigation,” Ocwen said in a statement Wednesday. “The Bureau’s allegations regarding Ocwen’s past servicing practices were without merit. We are pleased the Court has entered final judgment in our favor against the CFPB, and has ordered this case closed.”

The CFPB had alleged that Ocwen botched basic servicing functions by sending inaccurate monthly statements to borrowers, improperly crediting payments, and mishandling taxes and insurance in escrow accounts.

Ocwen separately faced significant litigation in 2017 from at least 20 states alleging misconduct dating back to the 2008 financial crisis. In October, Ocwen agreed to settle the last state claim, with Florida, by paying $5.1 million and an additional $1 million to resolve any pending loan-modification obligations, the company said.

Ocwen has made significant structural changes since the financial crisis after regulators essentially forced former CEO Ron Faris and founder Bill Erbey out of the company. Ocwen also changed its servicing system after its merger in 2018 with PHH.



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