In addition, authorities in Florida, North Carolina, and at least 18 other states have issued cease-and-desist orders against Ocwen to address mishandling of consumer escrow accounts and a deficient financial condition, specifically prohibiting Ocwen from acquiring new mortgage servicing rights and originating mortgage loans.
A separate lawsuit came today from the Florida attorney general and other state regulators are hitting Ocwen with cease-and-desist and license revocation orders, the CFPB said, allegedly for escrow management and what the agency called "licensing issues". The services Ocwen botched, according to the consumer watchdog, included sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.
The actions against Ocwen also weighed on shares of two other mortgage servicing companies, Altisource Portfolio Solutions SA (ASPS.O) and New Residential Investment Corp (NRZ.N), which fell by more than 36 percent and 12 percent, respectively. 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.
"We allege that these violations were significant and systemic, and harmed thousands of consumers", CFPB director Richard Cordray said on a conference call this afternoon.
"Ocwen strongly disputes the CFPB's claim that Ocwen's mortgage loan servicing practices have caused substantial consumer harm", the statement said.
The CFPB alleged Ocwen "illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers' records". North Carolina's bank regulator said fixing some of the company's problems could put it out of business. 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".
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Founded in 1988, Ocwen has more than 9,000 employees and services mortgage loans in all 50 states and the District of Columbia.
"Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment", the statement continued.
Ocwen is one of the country's largest nonbank mortgage servicers, servicing nearly 1.4 million loans.
The company said the accusations by the federal agency are "inaccurate", "unfounded" and the result of a "self-serving conclusion".
Numerous errors, the CFPB says, came about through Ocwen's flawed proprietary servicing system that the company's servicing head once referred to as a "train wreck".