Ocwen Forced to Freeze 17k Foreclosures

by William Hudson

Over 17,000 loans placed on foreclosure hold, that Ocwen likely has no right to foreclose upon in the first place.

Ocwen not only has been posting huge financial losses this year, but the non-bank servicer has finally been halted from foreclosing on more than 17,000 loans it services due to violations of the National Mortgage Settlement that it failed in the second half of 2014.

Joseph Smith, the monitor of the National Mortgage Settlement (NMS) announced back in October that Ocwen had failed metric 31. Metric 31 tested whether the mortgage servicer sent a loan modification denial notification to a borrower that included the reason for the denial, the factual information considered by the servicer in making its decision and a time-frame by which the borrower can provide evidence that the decision was made in error.

According to Smith, Ocwen failed to remedy the issues that led to the compliance failure.
Smith’s office stated that Ocwen “was delayed” in implementing its Corrective Action Plan for the failure because of “difficulties in resolving the technical issues that led to the original fail.”   Therefore, Ocwen must place 17,496 loans that “could have been affected” by this issue on hold and cannot pursue foreclosure.

“While Ocwen has made progress toward correcting a number of past fails, it has not resolved its issues that led to its failure of Metric 31,” Smith stated. “Therefore, I will not allow Ocwen to move forward with foreclosures on any borrowers who could have been affected by this failure until each of these borrowers has correct information and a chance to appeal,” Smith said. The freeze will not be lifted until every borrower who was possibly been affected receives the correct information and is offered a chance to appeal.

However, this is a minor slap on the wrist for Ocwen who routinely violates the National Mortgage Settlement in ways much more egregious than this. In fact, all banks that agreed to the National Mortgage Settlement are in serious breach of their NMS agreements.  There has literally been NO change in behavior except that the banks have become more sophisticated in their ability to create the illusion of compliance, while continuing to present fabricated documents to foreclose.

The fabrication of documents has now resulted in tens of thousands of foreclosures by entities that had NO standing to foreclose but were able to create the prima facie appearance of holder status by presenting fabricated endorsements, assignments, notarizations and false affidavits.  The noncompliance of Ocwen and other big banks should be grounds for lawyers to challenge legal presumptions because we have, again, obvious proof in the public domain that Ocwen has not complied with the National settlement, has not performed any real audit as to pretender lender, ownership, authority and standing of the loans Ocwen services.

However, this a deliberate sleight of hand. Why are we focusing only on the servicer to the exclusion of the principal who is being named as Plaintiff in Judicial states or as beneficiaries in nonjudicial states? What the banks are doing here is a PR trick. The banks are getting everyone to focus on the bookkeeping for the payments instead of whether Ocwen had any right to be involved in the first place- because it was serving at the behest (allegedly) of a trust that does NOT and never did own the loan. The auditor is well aware that Ocwen has bigger issues than failing to correct metric 31- but the NMS monitors must maintain the appearance that they “mean business” and that has resulted on focusing on a relatively inconsequential detail.

The real question is why is anyone relying upon Ocwen? Best case scenario is they are a bookkeeper who keeps tracks and enforces payments and then forwards them to the alleged creditor. Ocwen doesn’t know or care if the purported creditor is the creditor. They just do their work and PRESUME (best case) that they have the name of the creditor. We all know now that any trust named as a creditor is NOT a creditor because if they were, there would be an assertion that the trust was a holder in due course which would eliminate all borrower defenses.

The worst case scenario is that they are not forwarding payment to any creditor and they have no idea who the trust is or if it still exists. We know the trusts are empty, we know most loans were not delivered to the trusts, we know there is no holder in due course- so why are we focused on the fact that Ocwen violated one metric when it has violated all settlement metrics and is engaging in massive fraud?

Not to be deterred by the NMS reprimand, Ocwen spun the issue into a positive stating, “Families across the country are still being impacted by the financial crisis,” the company stated. “Ocwen will continue to work with our customers, especially those facing foreclosure, to find loan modification programs, including principal reduction programs, to help them better afford and remain in their homes.”

What Ocwen really should have said is “Families across the country are still being impacted by the financial crisis because we have snowed Congress and the Courts.” Furthermore, “Ocwen will continue to confuse and deceive our unfortunate customers, especially those who are going to end up giving us their home, find ways to deny loan modification programs, and hope they find a place to rent.”


The National Mortgage Settlement was an insignificant slap on the wrist and was nothing more than a “cost of doing business” tax deduction that will do little to impact their bottom line. This strategy is similar to the pharmaceutical companies who create billion-dollar blockbuster drugs by “fudging”  clinical safety trials, knowing that in 7 years when the drug goes off-patent they will likely be sued by approximately 5% of those treated by the drug who experienced medical complications (think Risperdal, Gardasil, etc). When you have a billion dollar a year drug, the $500 million dollars paid in damages is merely a cost of doing business and is built into the drug’s profit/loss structure. Apparently large banking institutions have the same profit strategy.

For instance, hypothetically, 90% of all homeowners will not fight foreclosure. Of the 10% who fight back, 5% of those homeowners will have their cases dismissed, another 2% will have incompetent counsel, and another 1% will have a biased judge. Therefore, the banks will face 2% of homeowners who persevere over great odds to simply enforce their right to due process. For the billions in profit they have made they will pay a paltry penalty. In order for the banks to change their wicked ways they must face heavy punitive costs, legal costs, fines and sanctions.

But even then, until bankers are prosecuted for criminal conduct- nothing is going to change because the banks will still be financially rewarded for their conduct. White collar banking fraud and forgery must be treated like any other type of fraud and forgery. The crimes are identical. The banks are confident (after 8 years of this behavior) they will not be heavily fined by government regulators or the courts; and no bank employee will be prosecuted.  The banks have received a message to pillage with abandon and forge, fabricate, deceive, and conspire with impunity if you wear a tie or expensive shoes. The banks are modern day pirates but instead of a ship, hook and eye patch; they conduct their crime with Bugattis, Breitling watches, and Lasik surgery.

When the National Mortgage Settlement actually starts to penalize servicers for foreclosing on loans they don’t own- the NMS will have done their job. Stories like this are merely window dressing for an ineffective program that has no chance of deterring the behavior of the pretend lenders.  Until bankers and their counsel are charged criminally for their conduct or huge punitive awards are given to homeowners who lose their homes- it is business as usual for the banker crime syndicate. Ocwen being forced to put 17k foreclosures on hold does one thing- it gives them more time to fabricate documents to ensure the “metrics” appear to be met.


18 Responses

  1. Why don’t you file a motion to dismiss for failure to prosecute?

  2. How can you determine if your case is one of the 17k+ that have been “frozen”? My trial is set for this July and I am scrambling for something concrete to take before the trial court when I request a continuance?

  3. Not to minimize anyone’s problems (because I know this stuff certainly is very stressful) but I have to say, Ocwen really isn’t that bad… they were easy to figure out. It’s WELLS FARGO that is driving me bananas. They deny EVERY loan mod, short sale, anything. Lately denying EVERYONE, ANYTHING, ANYWHERE. They help NO ONE. They never have been great, but it has gotten worse I’d say in the last month or so.

    I have one lady who I am helping and we got 1 denial for too much income, the next stating that she makes too much money and can AFFORD her payment. The third: “No Change In Circumstance” – even though she got a new job! WHAT?!

    I have been in the industry as a counselor for about 8 years now and NEVER have I seen this, and I fully understand denials and can sort through and fix them 98% of the time. But this, with Wells lately, is beyond ridiculous. Are they just sick of modifications and want to finally “cut off the fat” and finally dispose of the non-performing loans as fast as they can? Just seeing if anyone out there has noticed.

    For now, Wells is on my sh*t list and believe me if I could bomb the crap out of them (with stink bombs that is) I would. They are ruthless.

  4. Reblogged this on California Freelance Paralegal.

  5. @ Carol u may want to complaint to AG, DOJ as well. They won’t be able to keep their story straight and u can start showing CFPB etc are doing their job or not. Some big cases for harrassment.

  6. Ken gets it!
    Now ask yourself this Ken…….
    Who are the remainderman / beneficial interests holders ?

    What rights do they have?
    What rights do they not have?
    Where did KCs money go?

    The Wife vs The Husband
    Split 50/50 Life Martial Estate.
    In order to fc (render the legal fiction insolvent ) ……


    I have a Problem with that ….

    KCs As One Half the Estate


  7. I know the obvious gets redundant but they will continue to operate that way and hide behind the Nuremberg Defense until somebody stands them up in front of a firing squad.

    Mind if I leave this here thanks:


    Make it a Great Day.

  8. OCWEN is dying a death of 1000 cuts ,, they aren’t part of “the club” and are being singled out to be the whipping boy for the majors… I have OCWEN and they basically forced me into a mod knowing that they had no standing and that their AOM was fraudulent… it’s going to be sweet when they go down for good.

  9. Citimortgage, acting for the Bank of America, also continues to act in violation of the consent judgment which they signed with the DOJ and all 50 State AGs here in Cameron County Texas. The judge of the 404th District Court in Cameron County, Texas, continues in her erroneous ways, and joins in with the ongoing fraudulent campaign. We have asked Joseph A. Smith to continue his regulatory effort, and enjoin our cause here in Cameron County. We are also on appeal now to the 13th Court of Appeal. When we have exterminated all these bankers but one, and he is hiding behind a rock in the Texas Badlands, we expect the rock to cry out ‘There is a banker hiding behind me! Bring the Sword of Justice and exterminate me!’

  10. @ carol

    I believe the Consumer Financial Protection Bureau is suppose to be the one to help you.


  11. I know 2 dif people that have loans serviced with ocwen,both had interest only terms one was 10,the other 3,both have interest rates above 6%.
    Their copy of the note has 2 phony endorsements from bankrupt entities to other banks and no recorded assignments,the same run around on attempting a mod,calls go to India and this crap is getting so crazy.
    This administration and every single congress man or women who has allowed this to happen needs to be held accountable,every bank/servicer,every crooked lawyer,judge all need to be removed from their position and put in their place.
    The American people have become so lazy,complacent and unable to organize in a way to take our country back from the criminals.

  12. I remember Ocwen, and their f/c mill, Moss, Codilis, Stewarski- a criminal organization if ever there was one. At the time, my wife and I thought we were refinancing in order to get away from them. Little did we know.
    So you read all you can and study this stuff and it has gotten even worse than it was in 15 years ago. Now they are expedienced criminals rather than novices. And they have tarnished the courts too.

  13. Yes the beat goes on, and it will keep on going against the homeowners until some bankster/servicers goes to jail.

  14. Ocwen just raised my mortgage by 80.00 a month and I can’t figure out from the paperwork why…I called my property taxes and insurance and they have only gone up 15.00 per month. Who do I complain to? They called me for over a year on my landline everyday…even on Sundays trying to get me to do a modification and finally I got rid of my landline. At least on an iphone I could block their number. All I can think of is to complain to my attorney general(mn)Anyone have any suggestions?

  15. Your percentage is wrong about the homeowners who have incompetent counsel. It is not 2% – it is almost 100% as the “counsel” has been told to not really defend the homeowners, and they do not seem to know much about securitization here in North Carolina (a non-judicial foreclosure state). If the counsel does fight the foreclosure for the homeowner they will probably lose prestige with their peers and face harassment from the judges from then on. I was told by my lawyer that there were only 2 questions the judge would ask at the hearing if I went through with contesting the foreclosure, which has not yet come up for the contesting hearing before a local court judge. I do not remember what question #1 was, but #2 would be “Why was I (and my husband) not making the mortgage payments anyway, into a savings account?” There are several signs of fraud in my mortgage loan, it was transferred from Countrywide to Bank of America, then to Bank of America’s non-performing division, then to SPS Select Portfolio Servicing, the current supposedly Power of Attorney acting for “Deutschebank National Trust Company, as Trustee, in trust for the registered holders of Morgan Stanley ABS Capital I Inc. Trust 2004-HE2, Mortgage Pass-Through Certificates, Series 2004-HE2.” The loan was pitched to us by a crooked broker who did indeed con us, calling us and soliciting us all the way from California’s American Residential Funding. He had all our financial information already he said from Fairfield (where we had bought timeshares recently), and he started looking for us a refinance of our current loan. He told us NOT to make the current payment due as “it would mess up the figures he was working with”. It is a sad story, he strung out the process for over 3 months and kept making it seem as if the refi closing was imminent. We did not know the real estate market had become the wild wild west of con games and deception. So we did not know any better. He put us in an ARM 2 years fixed, then adjustable up to 13.75% and adjusting every 6 months as the LIBOR rate adjusted. Oh wait, Deutschebank is one of the defendants in the government’s LIBOR rate-fixing fraud, too! But we should be and deserve to be bound by that loan, the lawyers and judges believe, even though the bank committed all kinds of fraud in its inception and we were babes in the woods not on a level playing field with the bank in dealing at an arm’s length. Yet we cannot muster any defenses. Does not matter what fraud the bank did, TILA has a statute of limitations for it, and so if the bank gets away with it for 3 years they are in the clear! What kind of fair is that? We are bound by the terms, but they are not bound by any standards of fair dealing? No statute of limitations on trying to foreclose, or on “holder” status. This is long, but I hope it will help someone else maybe, we have not been able to find any help.

  16. Yup, you are right, Neil….I am dealing with Ocwen. I have in possession multiple documents explaining how they acquired my “DOT and ALLEGED Note”…then add Delaware Court with another story. It’s a real who-done-it….now, I have a hearing with an assistant clerk in Pender County, NC….a freaking assistant clerk? What the heck does that woman know about Statutes, the rule of law, procedure and bank paperwork compliance?

    Way the hell out of her jurisdiction. My comment: that entire office is filled with files from “stolen houses”, period! And by the way, who gives these people authority? All of this constitutes serious violations of the Constitution and the law, even UCC rules. People will fight over bathroom gender issues, but lay down with this massive theft, which affects 100% of us…Good Grief

  17. We need to put a laser beam on Joseph Smith, CFPB, any pretender mender official. Ditto for Chase, PennyMac.

  18. What about Chase hiding behind Fannie Mae as investor. This is bull and everyone knows it. Chase never securitized their loans either and when they try to give you the bs that Fannie is the investor, that is your number one clue that there is in fact NO investor

Contribute to the discussion!

%d bloggers like this: