Tonight! Why the Bankruptcies of DiTech and Aurora Matters! Neil Garfield Show 6PM EDT

Thursdays LIVE!

The Neil Garfield Show — WEST COAST


or prior episodes

Or call in at (347) 850-1260, 6pm Eastern Thursdays


I get that the complexity of securitization and foreclosure litigation can be mind-numbing even to an experienced litigator. But once you start winning you get a rush. Tonight we talk about making some of the more tedious aspects of examination of the case productive for the lawyer and for the homeowner.

The continued appearance of DiTech and or Aurora is actually a sparkling example of arrogance emanating from the investment banks that too often control the narrative. If either DiTech or Aurora ever owned a single debt, it was probably one in a million.

With the bankruptcy petitions involving several entities bearing the name of DiTech or Aurora and additional bankruptcies involving closely related entities like GMAC and Lehman Brothers, somehow we have been led to believe that the investment banks were so negligent that they actually left the loans in the entities that filed petitions for relief in bankruptcy with schedules that were devoid of virtually any loans.

On the Show tonight Charles and Bill address the following:

How MERS misused the transfer of Aurora servicing rights to Nationstar, all starting out of the Lehman Brothers BK following the Mortgage Meltdown.

How borrowers can use these servicer bankruptcies, particularly the one of Ditech, to advance the following:

– Using notices (of the Ditech) of stay to manage litigation options;

– Ditech’s non-judicial foreclosure auctions are apparently on hold, due to the automatic stay rules and restrictions on recording documents, in their BK. Judicial actions by Ditech should be on hold too. These restrictions even limit Ditech’s ability to direct the removal of Lis Pendens in lawsuits in which they received a judgment.

How Ocwen may be using a recent merger with PHH to shore up their book of business, to ameliorate credit issues or avoid bankruptcy.

What Works and What Doesn’t


Note that the courts try to calls balls and strikes not decide, at least on appeal, who should win and then give an opinion that fits. It doesn’t always work that way but many courts do follow that simple rule of blind justice.


WORKS: Objection to qualified witness status, no records from the actual claimant, failure to establish entitlement to enforce before foreclosure was started.

We address the third issue on certiorari first. We hold that the ICA erred by concluding the declaration of Richard Work (“Work”), the Contract Management Coordinator of Ocwen Loan Servicing, LLC (“Ocwen”), rendered him a “qualified witness” under State v. Fitzwater, 122 Hawai􏰀i 354, 227 P.3d 520 (2010)

for U.S. Bank’s records under the Hawai‘i Rules of Evidence (“HRE”) Rule 803(b)(6) hearsay exception for records of regularly conducted activity. In addition, U.S. Bank failed to establish that it was a holder entitled to enforce the note at the time the foreclosure complaint was filed. See Bank of America, N.A. v. Reyes-Toledo, 139 Hawai􏰀i 361, 370-71, 390 P.3d 1248, 1257-58 (2017).

DOESN’T WORK: “Robosigning” assertion without proof that attacks the foundation of the document, BUT:

With respect to the first issue on certiorari, because it
is unclear what Defendants mean by “robo-signing” and because a
ruling on the legal effect of “robo-signing” is not necessary to

conclusory assertions that fail to offer factual allegations or a legal theory indicating how alleged “robo- signing” caused harm to a mortgagee are insufficient to establish a defense in a foreclosure action. Addressing the factual allegations underlying the “robo-signing” claim, however, we conclude there is a genuine issue of material fact as to whether Ocwen had the authority to sign the second assignment of mortgage to U.S. Bank. (e.s.)

BEST PRACTICES. Objections must be made timely and with some specificity. You should also be prepared to argue why the objections apply. Payment records will come in evidence not only of the record of payments but also as to anything else shown on the records. Objection to such records, once they have already been introduced or even accepted into evidence, is basically futile, although they could conceivably be later undermined and even potentially struck from the record on cross examination.

If you have a pretrial court order that requires disclosure of all exhibits and expressly states that the parties must state their objections to the proposed exhibits, you must file a notice of such objections. It is wise to state as many grounds as possible for the objection and cite to specific rules of evidence in your jurisdiction.

This is not a legal opinion. Get a lawyer before you act on anything contained in this article.

Homeowners Sue SPS in Class Action Over Failure to Mitigate

Thousands of cases like this one have pointed out that SPS and other servicers like Ocwen do not consult with any investor, do not evaluate the case for settlement, modification or mitigation. The answer to questions arising from the unwillingness of those companies to comply with law stems from the fact that the  vast majority of their income comes from undisclosed third parties (the TBTF Banks).

TBTF Banks (BofA, Chase, Wells Fargo, Citi, etc.) do not want settlements or modifications or anything that will make the loan start performing. Subservicers like SPS and Ocwen are used as conduits to other conduits that provides window dressing for claims of compliance or efforts to comply.

Contrary to common sense nobody wants a settlement or modification. The players would rather have the value of the alleged loan reduced to zero or less in the case of foreclosures requiring the bank to maintain the property without any hope of selling it. Common sense says that faced with a value of ZERO versus a value of $200,000, for example, any normal business would select the obvious —- $200,000.

The most extreme cases are where the modification is deemed approved and a new servicer comes in to dishonor it and forecloses, even though the homeowner made the trial payments. Yet Petitions to Enforce the modification agreement are rare; but when they are filed they are usually successful. And in many of those cases the modification is modified for a greater principal reduction than was originally offered.


FREE RESEARCH: Go to our home page and enter subject in search bar.

GO TO LENDINGLIES to order forms and services. Our forensic report is called “TERA“— “Title and Encumbrance Report and Analysis.” I personally review each of them for edits and comments before they are released.

Let us help you plan and draft your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult.

REGISTRATION FORM: You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions. The consult is important to determine how we may be of assistance in the drafting and filing of documents in court or complaints directed to law enforcement.

Purchase audio seminar now — Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations.



Whether or not the class gets certified or settled the suit brings up certain salient points which again give rise to the most common question of all, to wit: “Why is that?”

The answer is hiding in plain sight: None of these parties represent a creditor or owner of the debt . All of them represent undisclosed third parties who are making money hand over fist in the shadow banking market. A completed foreclosure represents the first and only valid legal document in their long train of lies promulgated by piles of fabricated, forged, robo-signed paper. The justice system isn’t always right but it is always final. That is the game the banks are playing.

If SPS or Ocwen actually was set up to help homeowners avoid foreclosure and preserve the value of the loan receivable they would lose virtually all their business. A performing loan would change the makeup of the pools that the players claim to have created. All the re-sales of the same loan would be based upon a loan, even if it existed at one time, that doesn’t exist presently.

So the players NEED that foreclosure not for investors or a trust that doesn’t exist, but for themselves because most of the proceeds of the re-sales of the same loan went the TBTF Banks. They want to preserve their ill-gotten gains rather than do anything that could possibly benefit investors. And the best way they can do that is with an Order or Judgment signed by a duly authorized judge in a court of competent jurisdiction — not with a modification.

Practice Hint: If you see a case that has been ongoing for 8-10 years that is a strong indicator that the investors have received a settlement and no loner have any claim for payment and/or that the “Master Servicer” is continuing to allow payments to investors out of a pool of investor money — i.e., a Ponzi scheme. Those continuing payments have been inappropriately named “servicer advances.” They are not “advances” because it is merely return of investor capital. And since the payments come from an investor pool of cash the payments are not from the servicer since the money came from the same or other investors.

They are called servicer advances because using that name fictitiously allows the “Master Servicer’ (actually the underwriter of the certificates) to claim a “recovery” of “servicer advances.” The recovery is ONLY allowed after sale of the property after a foreclosure where the buyer is a BFP.

So for example if payments to investors attributed to the subject loan are $2,000 per month, 10 years worth of “servicer advances” results in a “recovery claim” of $240,000. Generally that is enough to wipe out any equity. The investors get nothing. The foreclosure was actually for the sole interest and benefit of the banks, not the investors. And the homeowner again finds himself used as a pawn for others to make money over the rotting carcass of what was once his home.

Hence the trial strategy suggested would be drilling down on whether the trust is receiving payment from a “third party,” whether that party has rights of subrogation or is satisfied by some other fee or revenue. If you get anywhere near this issue the bank will fold up like a used tent. They will pay for confidentiality.

Ocwen Failing? Who cares — they don’t do the “Servicing” anyway

It’s only when you do the work — burrowing into all the data that the truth emerges. From many prior cases it has been obvious that the “boarding process” was a ruse. It was cover for the real parties who were manipulating data to suit their own needs contrary to their duties to the alleged investors and borrowers.

GO TO LENDINGLIES to order forms and services

Let us help you plan your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

GO TO WWW.LENDINGLIES.COM OR toschedule CONSULT, leave message or make payments. It’s better than calling!



see The real IT platforms masquerading as Ocwen

For years I have been saying and writing about the fact that the apparent servicer actually does nothing. Ocwen’s source of data capture and maintenance has been Altisource and now is supposedly being transferred to Black Knight, which we all remember is name change from LPS, who won fame by fabricating documents through its subsidiary or division, DOCX.

My educated guess is that Altisource was never the actual IT provider using the trade name “RealServicing.” It was always LPS n/k/a Black Knight and that is who is the hub in a wheel and spoke infrastructure designed to create the illusion of normal loan servicing.

Changes in servicing announced by one party or another would therefore have been just another change in musical chairs — where the names changes but the actual functions always stayed in the same place, which is why there were so many errors revealed when the REALServing platform was accessed from time to time. It reminds me when I studied auditing in my MBA program where the joke was revealed about French bookkeeping — one set for myself, one for my partner and the third for the government (and possibly a fourth for the spouse).

So when you have a witness from Ocwen who says that Ocwen “Boarded” the data or claims that the business records are those maintained by Ocwen on an IT platform controlled by Ocwen the answer is “not so fast.” As I have found in dozens of cases, the witness is unable to answer obvious questions that should have obvious answers. Follow up in your questioning and you might strike gold — once you plan out your cross examination of the robo-witness.

Altisource was under investigation by the CFPB, but the investigation was ended without charges. That investigation was “focused on the REALServicing platform and certain other technology services provided to Ocwen, including claims related to the features, functioning and support of such technology.”

The CFPB, in its lawsuit against Ocwen, claimed that REALServicing, the system Ocwen used to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information, was riddled with errors and technologically deficient.

Over the last several months, Ocwen has reached settlements with nearly all of the states that brought regulatory action, and each of those settlements stipulated that Ocwen develop a plan to move away from REALServicing.

So the obvious take-away is that REALServicing was neither real nor a reliable basis to perform service. And that means that Ocwen’s claims to strict “boarding” of loans could not possibly be true.

But if you look deeper, you find that Altisource was not being paid or not being paid enough to justify the service. This enhances my argument that they were only a conduit for data that was at all times controlled by LPS n/k/a Black Knight.

No Surprise: Ocwen & US Bank Hit by $3.8 Million Verdict in Chicago Federal Trial For Violations in Fake Foreclosure

“The jury, after deliberating for approximately 7 hours, determined that Ocwen breached its contract, violated RESPA for failing to adequately respond to Saccameno’s Qualified Written Request, violated the FDCPA and committed both unfair and deceptive acts in violation of the Illinois Consumer Fraud Act.  Monette Saccameno was awarded $500,000.00 in compensatory damages, $70,000.00 in non-economic damages, $12,000.00 in economic damages and $3,000,000.00 in punitive damages. Nicholas Heath Wooten, Esq.Ross Michael Zambon, Esq., and Mohammed Omar Badwan, Esq. led the litigation team on behalf of Saccameno.”

And I ask again: WHY DO OCWEN DOCUMENTS AND “BOARDING PROCESS” GET ANY LEGAL PRESUMPTION ON SCANT TESTIMONY AND EVIDENCE THAT WOULD NOT BE ACCEPTED AS FOUNDATION IN ANY COURT OTHER THAN ONE IN FORECLOSURE PROCEEDINGS? With this verdict and dozens of other verdicts, settlements, lawsuits and whistleblower  news stories has establishing a crystal clear pattern of conduct of fake foreclosures based upon false documentation, false posting of payments and a clear mission to seek foreclosure whether the homeowner is current in payments or not.

The many cases akin to this one against OCwen and US Bank should be served up to judges hearing foreclosure cases with a single message: the foreclosures you are allowing are wrongful. Your decisions are giving rise to many lawsuits for damages.

GO TO LENDINGLIES to order forms and services

Let us help you plan your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

GO TO WWW.LENDINGLIES.COM OR to schedule CONSULT, leave message or make payments. It’s better than calling!



Hat Tip Greg da’ Goose

Case Number: 1:16-cv-05278
Court: Illinois Northern
Nature of Suit: 423(Bankruptcy Withdrawl)
Ocwen Financial Corporation
U.S. Bancorp


This case shows that juries are still angry about the 2008 meltdown and that the entire burden was shifted to homeowners and taxpayers — who “bailed out” financial institutions that had no losses.

And it also shows that lawyers can get rich by charging contingency fees in wrongful foreclosure actions that most lawyers avoid or rush to settlement. It provides ample encouragement for homeowners to sue and for lawyers to take the cases.

So for those of you who are  contemplating filing a wrongful foreclosure action against Ocwen, or U.S. Bank or any of the other players that are acting in concert with Ocwen, here is a case that no doubt will be settled under “seal of confidentiality” (like thousands of others). I think it is high time for borrowers to pool their complaints in either a class action or mass joinder action.

And here are some of the causes of action that could be filed that a federal jury found were reasons enough to award $500,000 in compensatory damages and $3 Million in punitive damages:

  1. Breach of contract
  2. RESPA violation (failure to respond to QWR)
  3. FDCPA violations
  4. Violation of state law — Illinois Consumer Fraud Act: Unfair and deceptive acts.

There are many other causes of action that could be filed. Each case needs to be evaluated as to which causes of action are most appropriate for the subject “loan”, most of which have resulted in substantial verdicts.

And don’t forget the role of US Bank whose name is used as trustee of a trust that  either doesn’t exist, doesn’t own the debt or both. US Bank is paid a fee to pose as trustee not to BE trustee.

See also

Ocwen (OCN) Receives Daily News Sentiment Rating of 0.15

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 265 (N.D. Ill. 2018)

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 231 (N.D. Ill. 2018)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 3/9/2018

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 152 (N.D. Ill. 2017)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/8/2017

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 75 (N.D. Ill. 2015)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/19/2015

US Government Publishing Office
15-1164 – Saccameno v. Ocwen Loan Servicing, LLC et al

Bank Fraud News: The reason why banks and servicers should receive no presumption of reliability

The following is but a short sampling supporting the argument that any document coming from the banks and servicers is suspect and unworthy of any legal presumption of authenticity or validity. Judges are looking into self-serving fabricated documentation and coming to the wrong conclusion about the facts.

Chase following bank playbook: screw the customer

“Chase provided no prior notice to its cardholders that their crypto ‘purchases’ would be treated as ‘cash advances’ on a going forward basis,” according to the suit.

Tucker claims he was hit with about $140 in fees and a “sky-high” interest rate of 26 percent without warning after Chase reclassified his purchases as cash advances, a violation of the Truth in Lending act.

Fannie Mae and Freddie Mac Stealth: Hiding the elephant in the living room

Its never been a secret that Freddie Mac’s business policy is to remain stealth in any chain of title if possible, and to rely on the servicers to keep its presence a secret in foreclosure proceedings. In fact, this PNC case which was overturned against PNC, involved the Defendant’s assertion that PNC was concealing Freddie Mac’s interest in the loan. Freddie Mac’s business policy appears to rely upon nothing more than handshakes with the originators and servicers. Here is some verbiage from a “Freddie Mac – Mortgage Participation Certificates” disclosure (See: Freddie Mac – Mortgage Participation Certificates):

Deutsch files lawsuit against private mailbox troller following the Deutsch playbook of foreclosure

“Defendants, and each of them initiated a malicious campaign to disrupt the chain of title to prevent Plaintiff from enforcing its contractual rights in the 2006 DOT by way of recording fraudulent documents to purportedly assign the rights under the 2006 DOT without the consent of Plaintiff, and otherwise thereafter fraudulently transfer all rights via a trustee deed upon sale, even though no trustee sale was ever conducted. All subsequently recorded or unrecorded transactions are therefore null, void, and of no effect.”

EDITOR COMMENT: So Deutsch is admitting that its practice of recording fraudulent documents are “null, void and of not effect.” In order to get to that point Deutsch is going to be required to prove standing — i.e., definitive proof that it paid for the debt, which it did not. Deutsch is on dangerous ground here and might deliver a bonus for homeowners. As for the defense, is it really a crime to steal a fraudulent deed of trust supported by fraudulent assignments and endorsements?

Barclays Bank settles for $2,000,000,000 for fraud on investors

Barclays’ offering documents “systematically and intentionally misrepresented key characteristics of the loans,” and more than half of the loans defaulted, federal officials said.

Additionally, the Department of Justice reached similar settlements with two Barclays’ employees involved with subprime residential mortgage-backed securities. They will pay $2 million collectively.

The agreements mark the latest in a string of U.S. settlements with major banks over sales of tainted mortgage securities from 2005 to 2007 that helped set the stage for the real estate crash that contributed to the financial crisis.

Deutsch Pays $7.2 Billion for Fraudulent securitizations

Confirming settlement details the bank disclosed in late December, federal investigators said Deutsche Bank will pay a $3.1 billion civil penalty and provide $4.1 billion in consumer relief to homeowners, borrowers, and communities that were harmed.

The federal penalty is the highest ever for a single entity involved in selling residential mortgage-backed securities that proved to be far more risky than Deutsche Bank led investors to believe. Nonetheless, the agreement represents relief of sorts for the bank and its shareholders, because federal investigators initially sought penalties twice as costly.

Credit Suisse‘s announcement said it would pay the Department of Justice a $2.48 billion civil monetary penalty. The bank will also provide $2.8 billion in consumer relief over five years as part of the deal, which is subject to negotiations over final documentation and approval by Credit Suisse’s board of directors. [Credit Suisse owns SPS Portfolio Servicing.]

Ocwen Settles with 10 States for Illegal Servicing

“The consent order provides that Ocwen will transition its servicing portfolio off of its current servicing platform to a platform better able to manage escrow accounts and establish a new complaint resolution process,” the Georgia Department of Banking and Finance said in a press release. “Ocwen shall hire a third-party firm to audit a statistically significant number of escrow accounts in high-risk areas of the portfolio to determine whether problems continue to exist around the management of escrow accounts and to identify the root cause of those problems.

“Ocwen has faced many legal and regulatory challenges in recent years. In December 2013 it reached a settlement over foreclosure and modification processes with the CFPB and state regulators. A year later, it made a separate agreement with New York regulators that removed company founder William Erbey as CEO.

Wells Fargo Whistleblower is Fired Among Others Who refused to Lie to Customers

In 2014, according to Mr. Tran, his boss ordered him to lie to customers who were facing foreclosure. When Mr. Tran refused, he said, he was fired. He worried that he wouldn’t be able to make his monthly mortgage payments and that he was about to become homeless.

Joining a cadre of former employees claiming they were mistreated for speaking out about problems at the bank, Mr. Tran sued. He argued in court filings that he had been fired in retaliation for blowing the whistle on misconduct at the giant San Francisco-based bank. Mr. Tran said he didn’t want his job back — he wanted Wells Fargo to admit that it had been wrong to fire him and wrong to mislead customers who were facing foreclosure.




Ocwen Admission Confounds Judges and Experts

This is a blatant attempt at deception  — a deceit without which none of the Trusts would be recognized as legal entities much less the owner of loans. Ocwen is admitting that there is no single owner of the loan it is allegedly “servicing.” “There is no single owner of the account, but rather the account is one of many in a securitized investment trust.”

For the uninitiated, this statement might suffice or at least be threatening enough as a challenge to their experience and intelligence to direct them away from the central false assertion that the trusts own any loan. They don’t.

Let us help you prepare for deposition or trial: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps). to schedule CONSULT, leave message or make payments. It’s better than calling!

Hat Tip Bill Paatalo

see Ocwen Responsive Letter – CFPB – 11-03-2017

In this real live case, Ocwen is fulfilling its job that includes obfuscation as one of its paramount duties. After first “answering” the CFPB requests with obfuscation it then states “The ownership status of the account is based upon our review of our records as of the date of this letter.” It doesn’t say that the information is correct or even believed to be correct. It doesn’t say they performed due diligence to determine whether a true chain of ownership exists, combing the various records of “predecessors.”

Nor is there a statement that Ocwen is authorized to service the account. It simply says that it IS servicing the account. And of course then they do not assert the basis of their authority since they never asserted their authority. It is implied. It is assumed. In court, it might well be presumed by the court, the foreclosure mill attorney and even by the borrower and the borrower’s attorney. This is one of the errors that snatches defeat from the jaws of victory. An attack on what is missing instead of trying to dodge what is there would result in far more victories for homeowners.

The attorney’s client is Ocwen. Ocwen is impliedly asserting authority to service but can’t show it. In one recent case of mine, they came in with a Power of Attorney signed by someone who purportedly executed the instrument on behalf of Chase. The problem was that Chase was never mentioned before in any pleading, documents or testimony. The POA was false.

Back to ownership: “there is no single owner” implies that there are many owners. There are several problems with that assertion or implication that involve outright lying. Ocwen is saying that the loan is in a securitized investment trust which certainly would imply that the loan is not in transit nor is it owned by more than one trust.

Further if the reference (omitted) is to investors, that too is a lie in most cases. The certificate indenture usually contains the express statement that the holder of the certificate receives no right, title or interest to the debt, note or mortgage in “underlying” loans (which have never been acquired by the trust anyway).

So what are we left with? No single owner which means that the securitized investment trust doesn’t own it because that is one single entity. Multiple owners does not refer to investors because the express provisions on their certificates say they have no ownership of the debt, note or mortgage in the alleged loan.

The counterintuitive answer is that the bank’s are saying there is no owner. But there is an owner. It is a group of investors whose money was used to fund or acquire the loan. This was not done through any trust, as they intended and as was required by the “securitization” documents. If that was the case then the trust would have been named as lender or as holder in due course. That never happened.

But the holders of worthless securities can claim an equitable interest in the loan and perhaps even the collateral. In order to establish that interest the investors must go to a court of competent jurisdiction. But in order to do that the investors must know about the specific loan transaction(s), which they don’t. The fact that they don’t know about it and can’t exercise their rights does not mean that legally, anyone can intervene and assert ownership rights.

Ten years ago I said get rid of the current servicers and stick a government agency in as intermediary so that investors, as real parties in interest and borrowers as real parties in interest could do what the lending industry normally does best — work this out so that nobody loses everything and nobody gets a windfall. This could have all been over years ago and the impact on the economy would have been a powerful stimulus leaving no inherent weakness in our economy or our currency.

Unfortunately the courts strayed from making legal decisions and instead made a political decision to save the banking industry at the expense of homeowners.




Illusion of Confusion: Dealing with Unresponsive “Responses” in Discovery

The bank playbook is very simple: keep it as complicated as possible. That way the court and even the homeowner will come to rely on what the banks and so-called servicer say about names, places, documents and money. That’s how they sold the initial fraudulent MBS and around 10 million foreclosures.

If you had a high success rate and you succeeded in scaring most homeowners off from contesting fraudulent foreclosures, what would you do? You would keep going based upon a strategy of creating the illusion of complexity. The only really complex thing is the fact that the foreclosing parties make inconsistent assertions not only from case to case but from one pleading to another in one case.

What is simple? That the only two real parties in interest in this whole affair have been investors on one side and homeowners on the other side. Everyone else is an intermediary with little or no authority to do anything — a fact that has not stopped them from nearly destroying our financial system.

For reasons that have been discussed elsewhere on this blog, the acceptance of the illusion of confusion by the courts is NOT rooted in law, as it is required to be, but rather in politics. This isn’t the first time the courts made political decisions and it won’t be the last. But through persistence and good litigation techniques homeowners who went all the way to the end have often prevailed — probably because the judge was too uncomfortable once the real nature of the asserted transactions was revealed.

NEED HELP DRAFTING A COURT DOCUMENT? We can help you with Discovery and Compelling Responses to Discovery Requests with Our Paralegal Team that works directly with Neil Garfield! We provide services directly to attorneys and to pro se litigants.

Get a LendingLies Consult and a LendingLies Chain of Title Analysis! 202-838-6345 or to schedule CONSULT, leave a message or make payments.

OR fill out our registration form FREE and we will contact you!



I was writing an article on discovery when by coincidence Dan Edstrom who has been our senior most forensic analyst since 2008 forwarded some questions and comments about the discovery process. He understands full well that the discovery process does NOT consist of just asking a question or asking for a document and the other side then gives you all you need to win.

No, the response will be framed to confuse, which is generally enough to make the homeowner or the foreclosure defense walk away. The foreclosure goes though even though it is most likely completely fraudulent.

And the message that goes out to the world is the banks are winning a huge percentage of foreclosures when in fact they pretty much don’t win when the foreclosure is ably contested.  The issue is obvious — not enough people are ably contesting foreclosures.

In discovery it usually starts with interrogatories. And the first question is who is answering the interrogatories. So in one example, the answer was Sally Torres. The response was that Torres was “from” Ocwen Financial Corporation (OFC). She is described as a “representative” of OFC, which leaves open the question of the identity of her employer.

Back to basics — A corporation is a legal person. And THAT means it is not the same as another legal person, as for example Ocwen Loan Servicing (OLS).

So you need to read carefully and not skip the parts that nobody pays attention to — like the answer to the question and the verification where Torres signs the response. There she signs as a “representative” of OLS not OFC. That ,eaves open the same question but also adds another — is she a representative of both legal persons (OFC and OLS)? If so what is the nature of her “agency” for either legal person? If she is not an employee is there a contract?

The answers further state that she is a “Senior Loan Analyst” for OFC and a “Senior Loan Analyst” for OLS. Is it both? How does that work? And of course that gives rise to yet another question — What is a Senior Loan Analyst? Google it.

Job Summary. Responsible for analyzing financial and supporting documents on incoming applications consistent with internal and insurer policies. Evaluate property values based on appraised market prices and recommend or deny mortgages to clients after examining financial status.

Hmmmm. This sounds like a made-up title to impress a judge. The industry definition of a loan analyst describes a job that ends with the approval of a loan. What would a loan analyst know about foreclosure — years after the alleged origination of the alleged loan? More specifically, what did Torres actually know or do with regard to the subject loan? It doesn’t take a genius to speculate about a number of questions:

  • Did Torres actually sign the verification?
  • Why was a loan analyst necessary in the litigation of a foreclosure?
  • Is Ocwen a lender? Why need a loan analyst?
  • What as it that Torres analyzed?
  • Did she review the work of a “Junior” Analyst ?
  • Did someone else draft the answers?
  • Was there anyone who had personal knowledge of the loan history involved with answering the interrogatories?

The kicker in the case I reviewed, was that the notice letters were sent not by any Ocwen entity but by Wells Fargo. The problem here is that most lawyers do not wish to confess their ignorance and therefore don’t follow through with obvious questions. Everything they are seeing is incomprehensible and confusing.

Here is another example right out of a hearsay treatise: The “Plaintiff” in an unlawful detainer (eviction) action makes the assertion that the rental value of the subject property is $1,800 per month and that the only way they know that is from a website called “Rentometer.” How this number is calculated by the website is unknown. Nor do we know if any person was involved. But Judges regularly take this representation to be true, even though it comes from a declarant not present in court.

Here is the rub. If the attorney for the homeowner fails to raise an objection and motion to strike that assertion or representation the objection is waived. But on cross examination of the robo-witness it is fairly easy to show that there is no appraisal or opinion rendered by the witness, nor could there be. It is also fairly easy to establish that the witness has no idea who runs, operates, owns or is otherwise involved with Rentometer.

Like Zillow and other sites, Rentometer does not employ people. It employs computer algorithms that may or may not work in any given situation.

For all we know it is a site set up by the banks that looks professional but is used specifically to extract outsize rents from people defending their property. (thus cutting off income that could be used for an attorney).  It looks like it might be useful but no presumption should arise from the projection by Rentometer unless someone from Rentometer can lay the foundation for the estimate. But that would mean putting a person on the witness stand who is not a robo-witness so the foreclosing party is going to fight against that tooth and nail.

And of course any site that leis exclusively on algorithms could not possibly take into consideration whether the subject property is habitable, the school district, and other factors that apply to both marketability and price. In the case presented it appears that the rental value is zero or in fact negative. That is because the property’s condition is such that nobody would move into it without extensive major repairs and because taxes and maintenance of the exterior would still need to be paid.

And then there is this example: You ask for the documents that support the authority of the alleged new beneficiary to substitute the trustee on the deed of trust. You get back an assignment. But it turns out later, in court, that they are relying upon some additional unrecorded assignments. So you ask for the additional unrecorded assignments and the response is essentially “We already gave you the assignments.” In  this case with 1 recorded assignment and 2 unrecorded assignments their answer is exactly 1/3 true and 2/3 untrue. And THAT is why you need to be prepared to compel their response by a specific court order pointing to those documents and any others that pertain the request for production.

The most challenging thing after the foreclosure sale is to prove it should never have taken place. But it is possible and necessary to do that if you want the property or you want leverage for a settlement. You are challenging circular reasoning.

Their argument is that they followed the rules and appointed a substitute trustee who sold the property. Your answer is that the new ‘Beneficiary” was not a beneficiary, had no right to substitute the trustee and thus no right to file a notice of sale (nonjudicial states).

Here is where legal presumptions point the court in the wrong direction. Because the sale took place and it was “facially” valid, the presumption adopted by the court is usually that there was a sale even though you are contesting that narrative. You say that a sale didn’t take place, particularly where there was “credit bid” on behalf of an entity that had no interest in the debt and therefore could not possibly submit a credit bid.

Lastly the sleight of hand trick that is so successful for the banks is the assertion or inference that there is a trust. In this case US Bank is asserted, probably without tis knowledge, as the trustee of certificates which is no trusteeship at all. Even if you slip in “the holders of certificates” they still have not named a beneficiary.

So the common error being made out there is to ask for answers and documents and so forth and accepting the response from the servicer or alleged servicer. Back to basics: the  first question should be “please identify the person or entity that is the [Plaintiff (judicial state or any eviction action) / beneficiary on the deed of trust (nonjudicial states)].

Then the next question should be “Is the party executing the verification of these interrogatories an employee, officer of said Plaintiff/Beneficiary? They will respond with gibberish because the real party in interest is a remote “Master Servicer” of a trust that doesn’t exist.

And of course “Where are the records of the Plaintiff/Beneficiary that relate to the subject alleged loan?” Once again they will respond with gibberish because they want the court to accept the fabricated records of Ocwen as though they were the records of the Plaintiff/Beneficiary whose books and records do not exist. The closer you get the more likely they are to walk away or offer a settlement that includes a seal of confidentiality. And yes I have seen this scenario thousands of times.










Ocwen Boarding Process Was Shot Down Last Year

As foreclosure defense lawyers have been saying for years, the Ocwen Boarding process is a sham. “This boarding process is a legal fiction, and it means something different to every entity,” Butchko ruled from the bench during a March 17 hearing.

Ocwen does not verify any of the data. It downloads it and then “calls it a day.”

“I have done this investigation for a long time,” he said, noting, “The appellate courts are going under this presumption that there is some type of meaningful auditing and verification.” But Jacobs maintained, “You just heard it from a lawyer who knows how to properly phrase the questions that she’s basically testifying to all — all of this is still hearsay.

”Butchko granted an involuntary dismissal in HSBC Bank USA’s suit against Miami homeowner Joseph Buset, whose loan was initially serviced by Litton Loan Servicing LP, which Ocwen acquired in 2011.

We can help evaluate your options!
Get a LendingLies Consult and a LendingLies Chain of Title Analysis! 202-838-6345 or to schedule CONSULT, leave a message or make payments.
OR fill out our registration form FREE and we will contact you!

See Home Foreclosure Fails on OCwen Servicing Records

Bruce Jacobs, a Foreclosure defense lawyer won this case. It was in 2016 and was, as usual, under-reported. The case hinged on the prior records of Litton Loan Servicing that Ocwen had acquired. The robo-witness could only testify that Ocwen employees had matched fields and columns on the payment history and had done nothing else. Hence verification was nonexistent.

[Judge] Butchko had to decide how to treat loan documents that became part of Ocwen’s business records but remained subject to hearsay objections unless the company could show it independently verified the data after transferring the loans. She considered evidence on Ocwen’s boarding process — the procedure by which financial services companies transfer account data from one lenders’ management system to another after trading loan portfolios.

Witnesses for lenders in foreclosure cases must show they did independent fact-checking to qualify their files as business records and not hearsay.

All records in  digital or hard copy are hearsay by definition. The only issue is whether a proper foundation has been offered by the robo-witness to claim that the “documents” qualify as an exception to the hearsay rule and that therefore they should be admitted into evidence. This case on Ocwen clearly shows that the testimony by dozens of Ocwen robo-witnesses has been false.

Based upon information I have received from credible sources I think the problem is worse than that. My sources tell me that the records are not uploaded or transferred. The only thing that happens is that the user name and password is changed. That is why the records of the prior servicer are NEVER introduced. It may be that Ocwen changes the fields and columns to make it appear that the records have been processed, but based upon my information the Ocwen records are often taken from the same database. That being the case, the robo-witness should have been an employee of the former Litton servicing.



Ocwen to Shell Out $56 Million in Class-Action Settlement

Ocwen to Shell Out $56 Million in Class-Action Settlement

July 20th, 2017  |  by Alex Spanko

Ocwen Financial Corporation (NYSE: OCN) on Thursday announced that has reached a $56 million settlement over a federal class-action lawsuit, the latest in a line of issues for the troubled servicer.

The lawsuit stemmed from alleged problems with restatements in Ocwen’s 2013 and 2014 financial statements, as well as a 2014 consent decree from the New York State Department of Financial Services that prohibited the company from gaining additional mortgage servicing rights in the state.

The West Palm Beach, Fla.-based Ocwen originates and services reverse mortgages under its Liberty Home Equity Solutions subsidiary.

“While the company believes that it has sound legal and factual defenses, Ocwen agreed to this settlement in order to avoid the uncertain outcome of the trial and the additional expense and demands on the time of its senior management,” the company wrote in an 8-K filing.

The settlement includes $49 million in cash for the plaintiffs, along with an additional 2.5 million shares of Ocwen stock that the company pegged at about $7 million; under the terms of the agreement, the servicer can also elect to simply pay the additional amount in cash.

After insurance covers a portion of the outlay, Ocwen will end up taking a financial hit of $34 million to $36 million, which the company intends to record in the second quarter of 2017. Ocwen warned that that the decision isn’t final and remains subject to a judge’s approval.

“In the event the settlement in principle is not ultimately finalized and approved, the litigation would continue and we would vigorously defend the allegations made against Ocwen,” the company wrote.

Back in March, Ocwen made a major move to extract itself from the terms of the 2014 New York order, reaching a deal with the Empire State to remove a mandatory third-party monitor and create a potential pathway to begin acquiring servicing rights once more. The state had forced Ocwen to pay $150 million in fines stemming from record-keeping failures and improperly handled foreclosures as part of the consent order.

But Thursday’s settlement announcement still marks the most recent step in Ocwen’s ongoing regulatory woes, which remain ongoing on several fronts: The servicer must currently contend with a lawsuit from the Consumer Financial Protection Bureau and cease-and-desist orders from up to 30 states that bar Ocwen from gaining new mortgage servicing rights. Those orders generally did not affect Liberty’s operations, as RMD reported at the time.

Ocwen had attempted to shed the CFPB lawsuit by requesting an immediate ruling on the bureau’s constitutional authority, but in June a judge rejected that argument. Based on these challenges, Moody’s downgraded company’s outlook and projected more woes to come.

“The negative outlook reflects the expectation that Ocwen will continue to experience elevated legal and regulatory costs that negatively impact its profitability,” Moody’s wrote in its release announcing the downgrades.


NO TRUST ASSETS: In the eye of the storm

This is one more nail in the coffin of false securitization: the only assets attributed to apparent “Buyers” were those related to and including servicer advances. By severing the investors from their positions as creditors, the banks were able to create the illusion that they — or their “originators”, brokers, nominees, fronts and sham operators — were the owners of the debt. NONE of the “transfers” of the “loan documents” involved a purchase and sale of a loan. NONE of the original “loan documents” referred to an actual transaction between the homeowner and the originator. That is because at the base of the paper chain was an entity that served only as a conduit for the paperwork and which had nothing to do with the advance of money to or on behalf of any homeowner. The paper trail and the money trail diverged the moment the loan papers were executed.

Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.

Hat tip to CC who wrote to me with the following:

In the eye of the storm

I also wanted to share with you the LinkedIn career history of a young “document specialist” who claims familiarity with executing and creating loan documents. (Document specialist Matt Byas maintains a profile on LinkedIn.) He worked his way up through such foreclosure/loan mod fraud luminaries as Saxon Mortgage (Dennis G. Stowe, COO, later acquired by Ocwen), Bank of America (where his job was “filing back several file folders containing loan information and processing them at various points along the line as well”), Homeward Residential, Inc. (later acquired by Ocwen, received $1.31B in TARP money, disbursed $280M) where his job included “creating allonges”), Residential Credit Solutions, Inc. (plaintiff in the successfully appealed judgement above, beneficiary of Geithner’s first, entirely bogus PPIP auction and another less well-known, similar sweetheart deal with Tim and Amtrust’s loans in 2010, which led to the $2M verdict for the Illinois widow in Hammer vs RCS, receiver of $43M in TARP money, $6.6M spent aiding borrowers, dissolved in 2016 by 2013 acquirer MTGE after non-stop quarterly losses from the point of acquisition onwards, and again featuring Dennis G. Stowe, CEO). His services were also utilized at a law firm that collapsed into a spectacular heap of revealed fraud, Butler & Hosch, P.A., and a loan servicer prone to deals so distant from comprehensibility that they had to issue this clarification to a press release in 2009:
No actual mortgage loans were part of the transaction. The acquired assets consisted principally of advances made on behalf of borrowers who are in arrears and of the Master Servicing Rights pursuant to which the loans are serviced. (e.s.) Mortgage servicing consists of collecting payments from homeowners, remitting them to appropriate parties and managing the default cycle. The transaction with Citi Residential Lending is similar to AHMSI’s earlier acquisitions from Option One and other sellers of servicing. In addition, while $1.5 billion has been described in a number of media reports as a “payment” in the transaction for the Master Servicing Rights, the vast portion of this amount is related to outstanding servicing advances.”
That loan servicer, American Home Mortgage Servicing, Inc. eventually changed its name to Homeward Residential, and the document specialist no longer names it as a separate entity on his LinkedIn profile.

US Bank v Mattos: Ocwen’s Witness unable to collaborate U.S. Bank’s Records

Thanks to Investigator Bill Paatalo of BP Investigative Agency for the heads up on this case.  Furthermore if you are suing U.S. Bank please note that THERE ARE NO RECORDS KEPT BY US BANK OF ANY KIND other than receipt of a monthly fee.  Bill Paatalo will be dropping a bombshell on these findings in the next month.

Please see ruling:  US Bank v Mattos – No Standing 06-06-17

The Supreme Court of Hawaii on certiorari to the Hawaii Court of Appeals reversed a prior summary judgment when it was determined that Ocwen’s witness was unable to speak for the validity of U.S. Bank’s records.   Hawaiian attorney Gary Dubin did an exemplary job demonstrating why the fraudulent assigments were void, not just voidable and that US Bank could not prove standing to foreclose.

The Defendants complained that the circuit court improperly granted summary judgment when there were genuine issues of material fact including two mortgage assignments that were robosigned by persons with insufficient authority or personal knowledge as to what they swore to.  There were also two assignments to the securitized trust in the chain of US Bank’s alleged ownership that were only supported by hearsay declarations inadmissible pursuant to Hawaii’s Civil Procedure Rule 56 and Evidence Rules.  Therefore, the court ruled that the Defendant’s loan violated the requirements of the securitized trust’s Pooling and Servicing agreement.

U.S. Bank’s declarants also had no idea how earlier business records had been compiled in regards to the two invalid mortgage assignments allegedly assigned to the securitized trust.

It was ruled that the Intermediate Court of Appeals (ICA) incorrectly concluded that the declaration of Richard Work, the Contract Management Coordinator of Ocwen Loan Servicing, LLC (“Ocwen”), rendered him a “qualified witness” for U.S. Bank’s records under the Hawai‘i Rules of Evidence Rule 803(b)(6)- hearsay exception for records of regularly conducted activity.  In addition, U.S. Bank failed to establish that it was a holder entitled to enforce the note at the time the foreclosure complaint was filed(see Bank of America, N.A. v. Reyes-Toledo, 139 Hawaii(2017)).


Unfortunately in regards to the first issue on certiorari, the court was unfamiliar with the term “robosigning” and ruled that since the legal effect of “robo-signing” was not necessary to  the determination of the case, the court sidestepped the issue and set aside the ICA’s holding that, “conclusory assertions that fail to offer factual allegations or a legal theory indicating how alleged “robo-signing” caused harm to a mortgagee” are insufficient to establish a defense in a foreclosure action.


Addressing the factual allegations underlying the “robo-signing” claim, however, the court concluded that there was a genuine issue of material fact as to whether Ocwen had the authority to sign the second assignment of mortgage to U.S. Bank. With respect to the second issue on certiorari, the court affirmed the ICA in part and followed the majority rule in U.S. Bank Nat. Ass’n v. Salvacion (Hawaii App. 2014) and held that, “a third party unrelated to a mortgage securitization pooling and servicing agreement lacks standing to enforce an alleged violation of its terms unless the violation renders the mortgage assignment void, rather than voidable.”  However the court limited the holding to the judicial foreclosure context not impacting non-judicial foreclosures.


The court issued a reversal and vacated the prior March 9, 2016 Judgment on Appeal, as well as the circuit court’s August 26, 2014 Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Summary Judgment and Decree of Foreclosure against all defendants and remanded the case back to the circuit court.

It is unfortunate that the circuit court and Intermediate Court of Appeals were so obviously biased towards the homeowner that they refused to apply prior rulings of law that would have quickly resolved this case.  However, part of the MegaBank-Lower Court game is to exhaust the homeowner of financial resources, while abusing them with delay strategies, discovery deficits and the misapplication of established law.  When these unethical methods are employed and a homeowner is forced to return to the lower courts and start all over again, the banks and courts should immediately be held responsible for violations of due process and the deliberate use of legal abuse tactics. The homeowner should in time be compensated for the stress incurred, emotional trauma, any lost earnings, and any resulting physical and mental health degradation.  Only when there is a sufficient financial penalty will the banks and courts consider following the rule of law.



Bloomberg Law: Ocwen Loses Bid for Early Test of CFPB’s Constitutionality

Ocwen Loses Bid for Early Test of CFPB’s Constitutionality

By Chris Bruce

A federal judge June 2 blocked Ocwen Financial Corp.’s bid to test the constitutionality of the Consumer Financial Protection Bureau in the early stage of a closely watched enforcement case ( Cons. Fin. Protection Bureau v. Ocwen Fin. Corp. , S.D. Fla., 17-cv-80495, 6/2/17 ).

The ruling by Judge Kenneth Marra of the U.S. District Court for the Southern District of Florida allows the CFPB to proceed unimpeded with its April lawsuit alleging that Ocwen violated consumer protection laws in servicing loans of distressed borrowers.

Ocwen sought an early case conference on the constitutional question, saying it should be settled before allowing the CFPB to go further. Marra disagreed, saying that would depart from settled procedural rules and might delay the case. He said Ocwen may still make its constitutional attack on a motion to dismiss.

Marra also declined Ocwen’s request to seek U.S. Attorney General Jeff Sessions’ views on the CFPB’s constitutionality. In a separate order June 2, Marra said it’s “premature” to invite the Attorney General’s views at this point.

Marra said he can weigh that request again in the context of an Ocwen motion to dismiss. “Until a motion is filed setting forth the exact basis for the challenge, the Attorney General will not have sufficient information to determine whether he should intervene,” Marra said.

Ocwen: Case Unjustified

“We have reviewed the order, which addresses how the Court would like to have the constitutional attack presented to it,” Ocwen spokesperson John Lovallo said in an email to Bloomberg BNA. “We look forward to including that argument with all of the other reasons CFPB’s suit is unjustified and should be dismissed.”

Marra’s June 2 orders, especially his decision not to fast-track the constitutional issue, could help the CFPB in other litigation. In April, when Ocwen sought the case conference shortly after the CFPB filed its lawsuit, attorneys said Ocwen’s effort, if successful, might encourage other defendants in CFPB cases to make similar requests. Marra’s rulings give the CFPB more ammunition to fight any copycat moves.

The CFPB’s constitutional status is now being actively weighed by two federal appeals courts. The U.S. Court of Appeals for the District of Columbia Circuit’s full bench May 24 heard argument in a case involving PHH Corp. of Mount Laurel, N.J. Several observers who attended the argument say they expect that court to rule for the CFPB, perhaps setting up the case for consideration by the U.S. Supreme Court.

Meanwhile, the Ninth Circuit May 17 gave Burbank, Calif.-based D&D Marketing the go-ahead to challenge the CFPB’s constitutional status in an appeal from an enforcement lawsuit by the agency.

Ocwen is fighting a separate but related lawsuit filed the same day as the CFPB’s action. The suit by Florida Attorney General Pam Bondi (R), which also is being heard by Marra, similarly faults Ocwen’s servicing practices.

Ocwen is represented by Thomas M. Hefferon and Sabrina M. Rose-Smith of Goodwin Procter in Washington, and Bridget Ann Berry of Greenberg Traurig in West Palm Beach, Fla.

The CFPB is represented by Jean Marie Healey, Atur Ravi Desai, and Jan Edwards Singelmann.



Ocwen accuses California settlement monitor of fraudulent strip club, casino expenses

Claims Fidelity Information Services engaged in ‘fraudulent, abusive billing scheme’

Gavel scales of justice

Fidelity Information Services perpetrated a “fraudulent and abusive billing scheme” and engaged in gross dereliction of duty in its role as the independent monitor of Ocwen Financial’s 2015 settlement with the state of California, Ocwen said in a bombshell lawsuit filed recently.

In the suit, filed in California state court, Ocwen states that FIS made “fraudulent or negligent misrepresentations” in the invoices it sent to Ocwen, claiming that money spent at strip clubs and casinos, among other things, were legitimate business expenses. In its defense, FIS tells HousingWire the lawsuit is baseless, more on that below.

Ocwen also claims that FIS significantly overcharged Ocwen for its monitoring services, including claims that FIS employees worked “implausible amounts of time” on given work days. Ocwen also claims that FIS billed it for “every minute its associates were onsite, regardless of whether they were actually working.”

According to Ocwen, FIS employees “took breaks as often as 14 times a day, or were observed watching videos instead of doing their jobs,” even though FIS billed Ocwen as if the associate spent the entire time working.

In its lawsuit, Ocwen claims that it repeatedly questioned FIS about the legitimacy of the charges it levied on the nonbank, but said that FIS claimed that all invoices were for appropriate charges.

“Whenever Ocwen questioned the legitimacy of FIS’s invoices, or confronted FIS about their increasing enormity, FIS reiterated its misrepresentations that the hours and expenses reflected on the invoices were legitimately worked and incurred,” Ocwen said in its lawsuit. “By continuing to represent to Ocwen that its invoices were legitimate, FIS induced Ocwen to continue to pay millions of dollars for work that was not performed.”

Ocwen goes on to claim that FIS believed it had “free reign” to lie about its actions without fear of any consequences.

Ocwen originally engaged FIS in 2015 to monitor its settlement with the California Department of Business Oversight, which stemmed from accusations that Ocwen failed to turn over documentation showing that it complies with California’s laws.

FIS served as the monitor of the settlement for two years, with its term as the California monitor ending when Ocwen reached a new settlement with California earlier this year.

That settlement involved Ocwen making a cash payment of $25 million and being required to provide an additional $198 million in debt forgiveness through loan modifications to existing California borrowers over a three-year period.

Over the two years that FIS served as the settlement’s monitor, Ocwen claimed that its mounting monitor costs, which totaled $147.5 million from Jan. 1, 2014 through June 30, 2016 from its various settlements with regulators, were a significant drag on its business.

Back in July 2016, Ocwen disclosed that the CDBO monitor believed that “certain onboarding activities” relating to new California originations in 2015 were prohibited by the terms of the consent order, and represented a material breach of the settlement.

That led to the February 2017 settlement, in which the CDBO claimed that Ocwen committed “hundreds” of violations of state and federal law over the last 18 months, including violations of the California Homeowner Bill of Rights.

And while all that was going on, Ocwen claims that FIS was abusing its business relationship with Ocwen and overcharging the company on many different fronts.

Per Ocwen’s lawsuit, its original agreement with FIS established a $44.8 million budget for a 24-month review, including a loan-by-loan review of 50,000 loan files for California loans serviced by Ocwen.

But Ocwen claims that FIS “ran through” the $44.8 million budget for the two-year review in 11 months, while “delivering less than half of the work it was hired to do.”

Ocwen claims that FIS was on pace to charge Ocwen $120 million for the project, which would have been almost triple the project’s original budget.

Ocwen then claims that FIS “had every incentive to inflate the invoices it submitted to Ocwen,” because the company reimbursed its employees for their expenses out of its own pocket before billing Ocwen for the expenses.

Therefore, Ocwen believes that FIS intentionally ignored the “inappropriate nature of associate expenses” so it could pass them off to Ocwen and avoid its own financial loss.

“On information and belief, FIS exploited its position to enrich itself at Ocwen’s expense,” Ocwen said in its lawsuit. “It viewed this engagement as a license to steal from Ocwen.”

Ocwen’s lawsuit goes on to lay out several specific examples of “FIS’s rampant fraud,” including:

  • Submitting expense reimbursements for charges from strip clubs and casinos
  • Billing Ocwen for artificially inflated hours during which no actual work was performed
  • Submitting improper expense reimbursements that FIS associates were using as a form of supplemental income

And here’s a sample of Ocwen’s claims:

In a brazen example of timesheet fraud, FIS associates at the Coppell, Texas facility were caught watching videos on company time and leaving the office up to 14 times a day without “clocking out.” Ocwen expressed its concern to FIS and asked to see “key-swipe” data for FIS associates, which would enable Ocwen to identify timekeepers who left worksites excessively during each work day and to determine how long they were gone. FIS refused to provide the data and continued to charge Ocwen for the improper hours.

Ocwen also claims that FIS employees expensed meals at strip clubs and casinos, including expenses incurred at establishments such as: The Lodge: America’s Best Gentlemen’s Club; WinStar World Casino; Spearmint Rhino Gentleman’s Club; Buck’s Cabaret; and Harrah’s Casino.

Ocwen claims that even though such expenses are prohibited by FIS policy, the company billed Ocwen for the expenses nonetheless.

Ocwen also states that FIS employees “abused their rights to expense meals” by treating their $65 daily meal allowance as a $65 per diem, using the money to “buy groceries, personal items, and even alcohol—trying to get as close as possible to the $65 allowance.”

Ocwen claims that it brought these concerns to FIS management on many occasions, but was repeatedly rebuffed or told that the expenses were indeed legitimate.

In a statement provided to HousingWire, FIS denies Ocwen’s claims, stating that Ocwen’s lawsuit is without merit.

“The complaint filed by Ocwen Loan Servicing against FIS is completely baseless and we plan to defend ourselves vigorously against these false allegations and to pursue collection of the invoices this litigation was filed to avoid,” FIS said in a statement.

An Ocwen spokesperson, on the other hand, said that company’s lawsuit “speaks for itself.”

In a statement to HousingWire, Ocwen spokesperson John Lovallo said: “Our complaint speaks for itself, and documents that Fidelity Information Services exploited its position by submitting fraudulent, false, and improper invoices to Ocwen relating to FIS’s services and expenses. Ocwen intends to vigorously pursue all remedies stemming from FIS’s fraudulent and abusive billing scheme.”

And if you’re interested in reading Ocwen’s full filing for more of the company’s bombshell accusations against FIS, click here.

Here’s a detailed breakdown of Ocwen’s new restrictions by state

A deeper dive reveals what Ocwen can and can’t do going forward

The servicing issues at Ocwen Financial are allegedly so widespread that some states are placing stricter restrictions on the nonbank, beyond freezing the company’s ability to acquire new mortgage servicing rights.

On Thursday, a group of state business regulators issued joint cease-and-desist orders to Ocwen. The main announcement from the states shows that an examination into Ocwen’s servicing shows “several violations of state and federal law, including, but not limited to, consumer escrow accounts that could not be reconciled and willful and ongoing unlicensed activity in certain states.”

The orders also showed that the regulators are concerned with Ocwen’s ability to continue operating due to financial constraints, an issue that Ocwen denies.

The orders prohibit the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing, a subsidiary of Ocwen, until the company is “able to prove it can appropriately manage its consumer mortgage escrow accounts.”

However, HousingWire analysis of each state’s cease-and-desist order or accompanying press release, show that some states’ regulators are restricting Ocwen’s business much further than that.

In fact, in one state, Ocwen has basically been put of out business entirely.

All in all, Arkansas, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Maine, Massachusetts, Mississippi, Montana, Nebraska, Nevada, North Carolina, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, West Virginia, Wisconsin, and Wyoming each placed restrictions on Ocwen’s business, according to the Conference of State Bank Supervisors.

But several states’ restrictions were not equal to the others– namely Massachusetts and South Dakota.

According to the announcement from the Massachusetts Office of Consumer Affairs & Business Regulation’s Division of Banks, Ocwen is not only no longer allowed to acquire new mortgage servicing rights, the company is also no longer allowed to service mortgages in the state, at all.

Here’s how Massachusetts describes its reasoning for restricting Ocwen’s business:

Of paramount concern is the company’s deteriorating financial condition, in which the company has lost nearly $1 billion since 2014, and will not be profitable by its own estimations for at least two years. The company has not developed or implemented an effective plan to curb these losses.

The examinations and monitoring noted the company has shown ineffective management of consumer escrow accounts and their internal servicing systems.

Therefore, Massachusetts is requiring Ocwen to “develop and implement a plan to transfer its loan servicing activities for Massachusetts consumer mortgage loans to a Division-approved licensed loan servicer(s).”

That means Ocwen can no longer service any mortgages in the state and must work to transfer all current mortgages it services to other servicers.

According to the Massachusetts Division of Banks, Ocwen services approximately 34,472 loans in Massachusetts, representing 3.5% of Ocwen’s portfolio – all of which must be transferred away.

Massachusetts’ order also requires Ocwen to “either fund or place mortgage loan applications in process with other lenders at no loss to applicants, and to cease accepting new applications,” which means no new loans for Ocwen in Massachusetts either.

“The Division will be closely monitoring Ocwen’s compliance with the Order,” the Division of Banks’ order states. “During this time, consumers with mortgage loans serviced by Ocwen should continue to submit loan payments to Ocwen in normal course in accordance with their loan terms. Ocwen will continue to service these loans until an orderly transfer of the servicing is completed in accordance with the Order. Any current mortgage loan applications should continue to be processed.”

South Dakota also placed its own serious restrictions on Ocwen’s business in the state, in the form of halting all foreclosures in the state until the escrow issues are addressed.

Here’s how the South Dakota Department of Labor and Regulation’s Division of Banking described it:

Ocwen does not possess the competence, experience, character, or general fitness required to permit Ocwen to continue to acquire new business as a mortgage lender in South Dakota.

The public interest will be irreperably harmed if Ocwen’s mortgage lending liscense is not conditioned immediately.

Therefore, Ocwen is required to “immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business.”

Ocwen is also required to “immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can provide a third-party audit of its South Dakota escrow accounts showing that borrower funds are appropriately collected, properly calculated, and disbursed accurately and timely, and make any corrections of whatever type necessary to remedy all mistake, errors, and improprieties occurring due to Ocwen’s actions.”

Ocwen is also required to “immediately cease any and all foreclosures in the state of South Dakota until all South Dakota escrow accounts have been correctly and properly balanced and all corrections due to mismanagement of the escrow accounts have been effected.”

Nearly all of the other states list the same restrictions: no new mortgage servicing rights and no new loans to be serviced by Ocwen Loan Servicing, except for Nebraska and Rhode Island, which each expect Ocwen to provide detailed reports on its servicing activity on a frequent basis going forward.

The Nebraska Department of Banking and Finance states that Ocwen is prohibited from “the acquisition of mortgage servicing rights and the origination of mortgage loans until they are able to prove they can appropriately manage their consumer mortgage escrow accounts.”

Beyond that, Nebraska’s order requires Ocwen to provide a list of all the residential mortgages it services in the state, including the name, address, telephone number, and state of residence of the borrower; as well as the loan number; the owner of the loan; the account balance; and the location of any escrow funds.

Ocwen is then required to provide a report on the status of every Nebraska loan it services to the Nebraska Department of Banking and Finance every 10 days.

Ocwen is also required to provide written notice of all servicing transfers within 72 hours of execution.

And in Rhode Island, Ocwen “shall immediately cease from acquiring new mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen, which mortgage loans are secured by Rhode Island property, until Ocwen can provide the Department of Business Regulation with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, properly calculated, and disbursed accurately and timely.”

Ocwen is also required to “immediately cease acquiring mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen, which mortgage loans are secured by Rhode Island property, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities it currently maintains, as well as liabilities it has knowledge it will incur in the course of its business.”

Additionally, Ocwen is required to file written confirmation by 4 p.m. on May 22, 2017, stating that the company has stopped acquiring new mortgage servicing rights and acquiring or originating new residential mortgages serviced by Ocwen for properties in Rhode Island.

Ocwen is also required to provide the Rhode Island’s Department of Business Regulation with the following information: a list of all loans secured by Rhode Island property presently serviced by Ocwen, including the date such loans were originated; a list of all loans secured by Rhode Island property as to which Respondents are acting as a third party servicer, including the date such loans were originated; and a list of all pending acquisitions of servicing rights and applications for mortgage loans that would be secured by Rhode Island property that are in the pipeline.

Below is a list of the remaining states with relevant passages about each state’s restrictions on Ocwen:

ArkansasArkansas Securities Commissioner, B. Edmond Waters, issued a press release in connection with a cease and desist order issued against Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. are ordered to cease and desist from acquiring new mortgage servicing rights and originating new mortgage loans. The order prohibits the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its borrower mortgage escrow accounts.

ConnecticutThe Commissioner finds that the public welfare requires immediate action in order to prevent irreparable and immediate harm to Connecticut borrowers and the necessity of a temporary order requiring Ocwen to cease and desist from violating the laws cited herein, pursuant to Section 36a-52(b) of the Connecticut General Statutes in that, since December 2013, State Mortgage Regulators, including this Department, have been concerned about Ocwen’s mortgage servicing practices including, but not limited to, the misapplication of borrower payments and inaccurate escrow accounting and statements, and that the recent Multi-State Examination and CT Examination indicate that these issues have not been resolved, but rather may be exacerbated.  In addition, Connecticut borrowers have no ability to select a different mortgage servicer to remedy such persistent and pervasive errors by Ocwen.  Considering the potential harm to Connecticut borrowers and Ocwen’s inability to provide sufficient information concerning its existing borrower escrow accounts, the Commissioner finds it imperative that Ocwen cease from acquiring new mortgage servicing rights in connection with Connecticut residential mortgage loans for which it would have to maintain escrow accounts, and acquiring or originating new Connecticut residential mortgage loans serviced by Ocwen for which it would have to maintain escrow accounts, until it can ensure that the escrow accounts of its existing residential mortgage loan servicing portfolio in Connecticut are properly reconciled and that all Connecticut borrowers’ monies are maintained in segregated deposit or trust accounts for the benefit of such Connecticut borrowers.

District of ColumbiaThe majority of the orders prohibit the acquisition of new mortgage servicing rights and the origination of new mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and not further harm consumers. Some orders also require Ocwen to cease any ongoing unlicensed activity.

FloridaFiled a separate lawsuit over Ocwen’s servicing practices.

HawaiiThe Notice of Charges and Proposed Order prohibits the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its consumer mortgage escrow accounts. The Notice of Charges and Proposed Order also demands Ocwen to cease illegal unlicensed activity that is believed to be occurring in Hawaii.

IdahoThe department’s order prohibits Ocwen from violating Idaho law in the handling of consumer escrow accounts. Managing the money that borrowers remit as part of their monthly mortgage payments is critical to the business of a mortgage servicer, and the department’s order requires Ocwen to accurately and lawfully fulfill that function when dealing with Idaho borrowers’ mortgage payments.

IllinoisA search of the Illinois Department of Financial and Professional Regulation did not show record of Illinois’ actions against Ocwen.

MaineOcwen shall immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business; Ocwen shall immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by Ocwen, until Ocwen can provide the state regulators with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, properly calculated, and disbursed accurately and timely.

MississippiOLS shall immediately cease acquiring new mortgage servicing rights, and acquiring or originating new residential mortgages serviced by OLS, until Ocwen can show it is a going concern by providing a financial analysis that encompasses all of the liabilities Ocwen currently maintains, as well as liabilities it has knowledge it will incur in the course of its business; OLS shall immediately cease from acquiring new mortgage servicing rights, and acquiring or originating new Mississippi residential mortgages serviced by OLS, until OLS can provide the DBCF with a third party audit of its escrow accounts associated with any Mississippi residential mortgage loans demonstrating that consumer escrow funds are appropriately collected, properly calculated, and disbursed accurately and timely; and make any and all corrections of whatever type necessary to remedy all mistakes, errors, and improprieties occurring in the past due to OLS’s Actions.

MontanaThe order prohibits Ocwen from acquiring new mortgage servicing rights until the company is able to establish that it can appropriately manage its Montana escrow accounts. Over the past three years, the Montana Division of Banking and Financial Institutions has handled 16 complaints against Ocwen and required Ocwen to credit $51,368.56 to Montana borrowers. Division officials will now focus on assisting borrowers who currently make mortgage payments to Ocwen.

NevadaThe majority of orders, including the order issued by the Nevada Division of Mortgage Lending, prohibit the acquisition of mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and prevent harm to consumers.

North Carolina Lead state in announcing restrictions.

South CarolinaA search of the South Carolina State Board of Financial Institutions – Consumer Finance Division did not show record of South Carolina’s actions against Ocwen.

TennesseeThe Tennessee Department of Financial Institutions (“Department”) issued today an enforcement action against Ocwen Loan Servicing to prohibit the company from acquiring new mortgage servicing rights or originating mortgage loans in Tennessee until it provides the Department with a plan to demonstrate an ability to operate in a sound manner.

TexasA search of the Texas Department of Savings and Mortgage Lending did not show record of Texas’ actions against Ocwen.

West VirginiaA search of the West Virginia Division of Finance did not show record of West Virginia’s actions against Ocwen.

WisconsinThe majority of orders prohibit the acquisition of new mortgage servicing rights and the origination of mortgage loans until the company is able to prove it can appropriately manage its existing mortgage escrow accounts and not further harm consumers. Ocwen conducts mortgage loan servicing for approximately 1.5 million consumers nationwide, including about 13,500 in Wisconsin.

WyomingA search of the Wyoming Division of Banking did not show record of Wyoming’s actions against Ocwen.

[Editor’s note: If any of HousingWire’s readers can assist in locating the missing states’ orders against Ocwen, please contact Ben Lane at This article will be updated as appropriate.]

Sub-Prime Mortgage Servicer Ocwen fabricates Mortgage Documents

Ocwen is the bottom-feeder of mortgage servicing companies.  Most survey’s rank Ocwen as the absolute worst in customer service and accountability including consumer research by J.D. Powers.  Ocwen acts as a debt-collector and our experience at LendingLies is that Ocwen often cannot identify the true creditor or provide any documentation demonstrating who owns the loan.  Ocwen then resorts to fabricating documents and obfuscation to keep the borrower in the dark until they can successfully foreclose.  Why is the CFPB and Multi-State Mortgage Committee not investigating Ocwen’s fabrication of loan instruments?

Last year we had a client from Texas contact us who was dealing with Ocwen.  He had pulled his paperwork and discovered that his loan was one of the Taylor, Bean & Whitaker (TBW) fraudulent transactions, there was no evidence that the note had ever been endorsed, and there were no assignments from TBW to Ocwen.   To overcome these issues Ocwen either photoshopped endorsements or assignments in-house, or went to a third party who creates fraudulent loan instruments and filed to foreclose.

The Lendinglies staff sent a copy of the note and assignment to a forensic document fraud examiner and he discovered that the “original” copies submitted by Ocwen were nothing more than computer-generated forgeries.  We did a little more investigating and discovered that  the “corrective” assignment of the Deed of Trust was signed by Ocwen employee Amber K. Wilson.

Amber K. Wilson was employed as a Servicing Operations Specialist at Ocwen since May 2015.   Located in Iowa, Amber’s Linked-In profile stated that her current duties included, “Researching Mortgage Documents to verify a full Chain of Title is present. If it is not create the needed Documents (sic). Work from Excel Spread Sheet daily as well as several internal data programs.”  Amber K. Wilson admitted on a public website that Ocwen Loan Servicing creates documents to create a “proper Chain of Title” if there are errors.

This is an admission that Ocwen employees are engaging in fraudulent activity by fabricating notes and assignments (the derogatory information has since been removed from her Linked-In profile but a screenshot of last year’s Linked-In profile is included below). Hopefully the CFPB and Multi-State Mortgage Committee who have filed lawsuits will investigate this type of criminal activity.

It is fraudulent to recreate a chain of assignment with fabricated documents to create the appearance the current servicer has standing. As Neil Garfield has repeatedly pointed out- copies of the note and assignment don’t document an actual transaction (sale, transfer)- they are nothing but window dressing to create the illusion an event occurred.

Our client was a victim of these sham documents Ocwen filed in the Tarrant county records. He has been fortunate enough to find an attorney who has successfully kept Ocwen at bay.  Texas is involved in the multi-state effort to regulate large servicers across the country while ensuring compliance with applicable state and federal law, while protecting consumers.

Amber Wilson’s Linked-In profile where she admits fabricating loan instruments:

David Dayen: The CFPB Just Sued a Crooked Mortgage Servicer, but Indicted Itself

The lawsuit against Ocwen is welcome, but should have happened four years ago.

Injured by Ocwen? Take Action Now!

By K.K. MacKinstry

Ocwen has admitted that its mortgage servicing policies and loan processing systems are a “trainwreck”.  As regulators and the Consumer Fraud Protection Bureau (CFPB) tighten the noose on Ocwen, we recommend that Livinglies readers who have experienced issues with Ocwen contact their state Attorney General offices, the CFPB, state banking regulators and government representatives to express your outrage and share your experience NOW.

Although Ocwen is being investigated for predatory servicing practices, please make regulators aware of the deeper level of fraud that is occurring and consists of fabricating and forging loan instruments including notes and assignments.  If you have been subjected to any of Ocwen’s tactics that push homeowners into default please provide this information to the aforementioned agencies.

The regulators found that Ocwen manipulates escrow accounts to create defaults and problems with taxes and insurance, does not respond accurately to submitted Qualified Written Requests, fails to properly post payments, revokes loan modifications without reason, and engages in other tactics designed to create loan defaults.  Now is the time to speak up about your experiences.  If homeowners damaged by Ocwen inundate the CFPB with complaints, perhaps this predatory servicing operation will be shut-down for good.

It appears that Ocwen’s business model and policies were designed to maximize the chances that a homeowner will default through processes that create confusion, disinformation and a deliberate lack of accountability by Ocwen.   Ocwen is not the only loan-servicing entity that engages in these practices, but it is the one currently in the regulatory crosshairs.  If these issues are brought to light, other loan servicers may be forced to change their business practices or suffer the same fate.

To file a complaint with the CFPB do so here.

To file a complaint with a state member, please do so here or find your state contact below:

AK – Alaska
Ms. Patrice Walsh
State of Alaska Department Commerce, Community & Economic Development
Chief Examiner

Phone Number:



AL – Alabama
Mr. Scott Corscadden
Alabama State Banking Department
Supervisor, Bureau of Loans

Phone Number:



AR – Arkansas
Ryan Drake
Arkansas Securities Department
Examiner Supervisor

Phone Number:



AZ – Arizona
Mr. Robert D. Charlton
Arizona Department of Financial Institutions

Phone Number:



Mr. Jeffrey Mason
State of California Bureau of Real Estate
Chief Deputy Commissioner

Phone Number:



Mr. Victor Wells
California Department of Business Oversight
Deputy Commissioner

Phone Number:



Ms. Marcia Waters
Department of Regulatory Agencies – Division of Real Estate
Department of Regulatory Agencies – Division of Real Estate

Phone Number:



CT – Connecticut
Mr. Carmine Costa
Connecticut Department of Banking
Director, Consumer Credit Division

Phone Number:



DC – District of Columbia
Mr. Christopher Weaver, Esq
Department of Insurance, Securities and Banking
Associate Commissioner of Banking

Phone Number:



DE – Delaware
E. Quinn Miller
Office of the State Bank Commissioner
Investigative Supervisor

Phone Number:



FL – Florida
Mr. Andy Grosmaire
Florida Office of Financial Regulation
Bureau Chief

Phone Number:



GA – Georgia
Mr. Rod Carnes
Georgia Department of Banking and Finance
Deputy Commissioner, Non-Depository Financial Institutions Div.

Phone Number:



HI – Hawaii
Ms. Iris Ikeda
Division of Financial Institutions
Commissioner of Financial Institutions

Phone Number:



IA – Iowa
Mr. Rodney E. Reed
Iowa Division of Banking
Finance Bureau Chief

Phone Number:



ID – Idaho
Mr. Mike Larsen
Idaho Department of Finance
Consumer Finance Bureau Chief

Phone Number:



IL – Illinois
Mr. Alan Anderson
Illinois Dept. of Financial & Professional Regulation, Div of Banking
Senior Counsel of Mortgage Banking Regulation

Phone Number:



Ryan Black
Department of Financial Institutions
Deputy Director

Phone Number:



IN – Sec. of State, Securities Div.
Mr. Alex Glass
Secretary of State, Securities Division
Securities Commissioner

Phone Number:



KS – Kansas
Ms. Jennifer Cook
Kansas Office of State Bank Commissioner
Deputy Commissioner – Consumer and Mortgage Lending

Phone Number:

785-296-2266 x209


KY – Kentucky
Ms. Tammy Scruggs
Kentucky Department of Financial Institutions
Division Director, Non-Depository Institutions

Phone Number:



LA – Louisiana
Mr. Darin Domingue
Louisiana Office of Financial Institutions
Chief Examiner

Phone Number:



MA – Massachusetts
Ms. Cindy Begin
Massachusetts Division of Banks
Chief Risk Officer

Phone Number:



MD – Maryland
Mr. Clifford Charland
Maryland Commissioner of Financial Regulation
Director of Mortgage Examination Process

Phone Number:



ME – Maine
Mr. Terry Fancy
Maine Bureau of Consumer Credit Protection
Principal Consumer Credit Examiner

Phone Number:



MI – Michigan
Mr. Kirt L. Gundry
Michigan Department of Insurance and Financial Services
Director, Mortgage Examination & Investigation Section

Phone Number:



MN – Minnesota
Sarah Butler
Minnesota Department of Commerce
Supervisor, Non-depository Institutions

Phone Number:



MO – Missouri
Mr. Mick Campbell
Missouri Division of Finance
Supervisor of Mortgage Licensing

Phone Number:



MS – Mississippi
Ms. Traci McCain
Mississippi Department of Banking and Consumer Finance
Director, Mortgage Division

Phone Number:



MT – Montana
Chris Romano
Montana Division of Banking and Financial Institutions
Non-Depository Bureau Chief

Phone Number:

(406) 841-2928


NC – North Carolina
Ms. Molly Sheehan
North Carolina Office of the Commissioner of Banks
Deputy Commissioner of Banks/Non-Depository Entities

Phone Number:



ND – North Dakota
Mr. Bob Entringer
North Dakota Department of Financial Institutions

Phone Number:



NE – Nebraska
Ms. Jean Angell
Nebraska Department of Banking and Finance
Review Examiner

Phone Number:



NH – New Hampshire
Ms. Raeleen Schutte
New Hampshire Banking Department
Director of Consumer Credit

Phone Number:



NJ – New Jersey
Mr. Thomas M. Hunt
New Jersey Department of Banking and Insurance
Assistant Division Director

Phone Number:

609-292-7659 x50223


NM – New Mexico
Mr. Joe Cruz
New Mexico Financial Institutions Division
Industry Manager

Phone Number:



NV – Nevada
Mr. James Westrin
Nevada Division of Mortgage Lending

Phone Number:



NY – New York
Ms. Rholda Ricketts
New York Department of Financial Services
Deputy Superintendent

Phone Number:



OH – Ohio
Zachary Luck
Ohio Division of Financial Institutions
Deputy Superintendent for Consumer Finance

Phone Number:



OK – Oklahoma
Mr. Scott Lesher
Department of Consumer Credit

Phone Number:



OR – Oregon
Kirsten Anderson
Oregon Department of Consumer and Business Services

Phone Number:



PA – Pennsylvania
Mr. Robert Knaub
PA Department of Banking and Securities
Director for Non-Depository Licensing

Phone Number:



SC – Board of Fin Inst.
Mr. Jim Copeland
SC Board of Financial Institutions – Consumer Fin. Div.
Assistant Commissioner

Phone Number:



SC – Dept. of Cons Affairs
Ms. Carri Grube Lybarker
South Carolina Department of Consumer Affairs

Phone Number:



SD – South Dakota
Ms. Jean Blow
South Dakota Division of Banking
Policy Analyst

Phone Number:



TN – Tennessee
Mr. Mike Igney
Tennessee Department of Financial Institutions
Assistant Commissioner / Compliance Division

Phone Number:



Ms. Leslie L. Pettijohn
Texas Office of Consumer Credit Commissioner
Consumer Credit Commissioner

Phone Number:



Ms. Caroline C. Jones
Texas Department of Savings and Mortgage Lending

Phone Number:



UT – Utah
Mr. Jonathan C. Stewart
Utah Division of Real Estate

Phone Number:



UT – Utah
Ms. Eva Rees
Utah Department of Financial Institutions

Phone Number:



VA – Virginia
Ms. Susan E. Hancock
Virginia State Corporation Commission
Deputy Commissioner

Phone Number:



VT – Vermont
Ms. Sue Clark
Vermont Department of Financial Regulation
Regulatory and Consumer Affairs Director

Phone Number:



WA – Washington
Mr. Charles Clark
Washington Department of Financial Institutions
Acting Deputy Director and Director of Consumer Services

Phone Number:



WI – Wisconsin
Cheryll Olson-Collins
Wisconsin Department of Financial Institutions
Administrator, Banking Division

Phone Number:



WV – West Virginia
Ms. Tracy Hudson
West Virginia Division of Financial Institutions
Director of Nondepository Institutions

Phone Number:



WY – Wyoming
Mr. Joe Mulberry
Wyoming Division of Banking
Deputy Commissioner

Phone Number:




CFPB Lawsuit: Ocwen fails Borrowers at every state of Mortgage Servicing Process

By K.K. MacKinstry, LendingLies

CFPB claims “widespread errors, shortcuts, runarounds cost borrowers money, homes”

Ocwen is in its death throes. Not only did 20 state banking regulators issue cease-and-desist orders but the Consumer Financial Protection Bureau also took action citing Ocwen Financial for “failing borrowers at every stage of the mortgage servicing process.”

Ocwen Financial engages in predatory servicing.

It is obvious by the allegations set forth by the CFPB lawsuit that Ocwen’s business model is not to service mortgage loans but instead to implement predatory practices that ensure defaults occur.  If Ocwen can successfully steer a homeowner into foreclosure, they receive an absolute financial windfall.  Ocwen’s reign of terror may finally be coming to an end.

According to the CFPB lawsuit, they allege that Ocwen cost borrower’s money and some of them their homes, with its history of “widespread errors, shortcuts, and runarounds.”

The CFPB states in the suit that Ocwen “botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

The CFPB says 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.”

What the CFPB failed to investigate is that Ocwen routinely robosigns notes and assignments and is unable to provide evidence of a creditor.  The CFPB is looking at the surface issues but unfortunately is not concerned about Ocwen’s deeper fraudulent practices

The CFPB uncovered “substantial evidence that Ocwen has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.”   Ocwen was aware that a CFPB investigation into its servicing practices was likely and set aside $12.5 million to settle with the bureau. Considering they are making huge profits from wrongful servicing and foreclosing on homes it doesn’t own- a mere $12.5 million is a pathetic penalty by any standard.

In October of 2016 Ocwen revealed that they were under investigation and it appears that Ocwen’s negotiations with the bureau were unsuccessful.

The CFPB release states that Ocwen serviced almost 1.4 million loans with an aggregate unpaid principal balance of $209 billion, at the end of 2016.  Servicing violations, include (from the CFPB report):

  • Servicing loans using inaccurate information: Ocwen uses a proprietary loan management system called REALServicing to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information.  Ocwen is accused of loading inaccurate and incomplete information into its REALServicing system. Even when data was deemed accurate (yeah- right), REALServicing generated errors because of system failures and deficient programming. To manage this issue, Ocwen attempted to implement manual workarounds, but they often failed to correct inaccuracies and produced additional errors. Ocwen then used this faulty information to service borrowers’ loans. In 2014, Ocwen’s head of servicing described its system as “ridiculous” and a “train wreck.”
  • Illegally Home Foreclosures: Ocwen brags about its superior ability to service and modify loans for customers. The investigation found that Ocwen has failed to implement mandated foreclosure protections. The Bureau alleges that Ocwen has wrongfully initiated foreclosure proceedings on at least 1,000 people, and has wrongfully held foreclosure sales (Livinglies readers know the numbers are likely triple this number or more). Ocwen dual-tracked customers and initiated foreclosure proceedings before completing a review of borrowers’ loan modification applications. Ocwen also repeatedly asked borrowers to submit additional information with a 30-day deadline, but would then foreclose on the borrowers before the deadline. Ocwen has also foreclosed on borrowers who were compliant with their obligations under a loan modification agreement.
  • Failure to post borrowers’ payments: Ocwen reportedly failed to appropriately credit payments made by some borrowers resulting in inaccurate account information. Ocwen also failed to send borrowers accurate periodic statements detailing the amount due, how payments were applied, total payments received, and other information.  Ocwen also failed to correct billing and payment errors.  It is well known that Ocwen does not respond to Qualified Written Requests or provide the information requested as a routine policy.
  • Botched escrow accounts: Ocwen manages escrow accounts to pay insurance and taxes for over 75% of the loans it services. Ocwen has allegedly botched basic tasks in managing these borrower accounts causing huge headaches for customers.  Ocwen has allegedly failed to conduct escrow analyses and sent some borrowers’ escrow statements late or not at all and blames it on computer issues.  Ocwen failed to properly account for and apply payments by borrowers to address escrow shortages, such as changes in the account when property taxes go up. This resulted in tax and insurance issues.


  • Hazard insurance issues: Ocwen failed to administer escrow account for customers. A servicer is obligated to make timely insurance and/or tax payments on behalf of the borrower if contracted to do so. Ocwen failed to make timely insurance payments to pay for borrowers’ home insurance premiums. Ocwen’s failures led to the lapse of homeowners’ insurance coverage for more than 10,000 borrowers. Some borrowers were pushed into force-placed insurance.
  • Private mortgage insurance failures: Ocwen failed to cancel borrowers’ private mortgage insurance, or PMI, in a timely way, causing consumers to overpay.  Borrowers must purchase PMI when they obtain a mortgage with less than 20% down, or when they refinance their mortgage with less than 20% equity in their property. Servicers must end a borrower’s requirement to pay PMI when the principal balance of the mortgage reaches 78% of the property’s original value. Since 2014, Ocwen has failed to end borrowers’ PMI on time after learning information in its REALServicing system was unreliable or missing altogether. Ocwen ultimately overcharged borrowers about $1.2 million for PMI premiums, and refunded this money only after the fact.
  • Deceptively charged homeowners for add-on products:  Ocwen pulled a Wells Fargo and enrolled some customers in add-on products through deceptive solicitations and without their consent. Ocwen then billed and collected payments from these consumers without their consent.
  • Heirs seeking foreclosure alternatives were denied assistance: Ocwen mishandled accounts for heirs or successors to deceased borrowers. These people included widows, children, and other relatives. Ocwen failed to properly recognize individuals as heirs, and thereby denied assistance to help these individuals avoid foreclosure. In some cases, Ocwen foreclosed on individuals who may have been eligible to save these homes through loan modifications or other loss mitigation options. This is the epitome of engineering a default so Ocwen could illegally steal a home.
  • Failed to adequately investigate and respond to borrower complaints: Servicer are required to investigate errors and correct the error identified by the borrower, called a notice of error. Since 2014, Ocwen has allegedly routinely failed to properly acknowledge and investigate complaints, or make necessary corrections.  In April 2015 Ocwen failed to address the difficulty its call center had in recognizing and escalating complaints. Under its new policy, borrowers must complain at least five times in nine days before Ocwen automatically escalates their complaint to be resolved. Since April 2015, Ocwen has received more than 580,000 notices of error and complaints from more than 300,000 different borrowers.
  • Provided incomplete and inaccurate information to new servicers: Ocwen failed to include complete and accurate borrower information when it sold servicing rights for thousands of loans to new mortgage servicers. This resulted the new servicers’ efforts to comply with laws and investor guidelines. It is likely that not only does Ocwen have incomplete payment histories but cannot produce the original notes or assignments without resorting to fraudulent means to recreate them.

The CFPB accuses Ocwen of failing to “remediate borrowers for the harm it has caused, including the problems it has created for struggling borrowers who were in default on their loans or who had filed for bankruptcy.”  The CFPB need only contact Livinglies and we will be happy to provide information about the challenges our clients have faced while trying to obtain basic information about their loans including who the real creditor is.  In some cases it appears that Ocwen had no idea who they were servicing the loan for.

CFPB Director Richard Cordray summarized Ocwen’s alleged failings.  He wrote, “Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” Cordray continued, “Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.”

Ocwen denying any liability and released a lengthy statement in response to the CFPB’s allegations. To read the statement click here.  The market responded with a drastic loss of over 50% per share.


Miami Judge: No Transaction=Unclean Hands. Judgment for Homeowner with Sanctions.

It’s time to sit up and take notice. Judges are turning the corner and getting pretty angry about what passed before as evidence. In April this order seemed like a shot in the dark. But now, we are seeing more and more judges actually study the chain of alleged transactions relied upon those who seek forced sale of a residence. The motivation of those seeking foreclosure is gradually being revealed this year. Not surprisingly they are not in the least bit interested in the property or the loan. They want a foreclosure judgment because THAT is what has value for them — getting the judge to unwittingly ratify all the preceding illegal acts and frauds perpetrated on the borrower and the courts. Once again our friends at Ocwen are named as the culprits, but this judge goes further when she says

‘This Court finds the AOM [assignment of mortgage] created in 2012 does not document a transaction that occurred in 2005, as Plaintiff suggests. The transaction described in the AOM never legally occurred.There was never a transaction between MERS and/or Freemont Investment and Loan that sold Defendant’s loan directly to the Trust. Not in 2012, not in 2005, not ever.’ (e.s.)

see ocwen-order

HSBC v Buset, Case # 12-38811 CA 01 Decided 4/26/16 Hon Beatrice Butchko

For about 10 years now I have endured taunts from people representing the banks or themselves citing case after case saying I was wrong in my legal analysis. I persisted because I knew I was right. The reality of a transaction is far more important than the self serving paperwork that parties use to justify their illegal actions  — the last decade notwithstanding. If there was no purchase of the loan then the assignee received nothing.

But more important than that is something that Judge Butchko seemed to pick up on. She asks the simple question: why would Ocwen violate a mandatory discovery order that would prove the Plaintiff’s case? Instead they tried to plow through without the reality of a single transaction in which a loan was made, purchased or sold.

If the alleged loan was not sold then why were there any papers showing a transfer of the “loan.” And if each party in the chain was paying nothing to the party before them, why was the assignor signing an assignment without getting paid for it. And if that is true for all the assignments and endorsements then was the originator a lender? If the originator received nothing in a purchase transaction for the alleged loan, the only logical conclusion is that there was no loan by the originator and there might have been no loan at all.

With that conclusion why would a party with no money in the “game” be suing for foreclosure? The answer must be completely separate from the loan because that is obviously of no consequence to those participating parties that were getting fees for executing documents that pretended that there was a purchase and sale of the debt. The answer is that foreclosure is the ONLY way they could cover their tracks in the false sales of mortgage bonds issued by an empty non-operating trust. If you look at decisions like this and thousands of other cases the conclusion is inescapable — a foreclosure judgment is the first and only legal document is the entire chain.

Here are some quotes

The Court takes judicial notice that on July 25, 2008, Freemont Investment and Loan (“Freemont”) entered into a voluntary liquidation and closing which did not result in a new institution. As such, the status of MERS as nominee for Freemont ended when Freemont closed on July 25, 2008, which renders the AOM created in 2012 void ab initio.

This endorsement is contrary to the unequivocal terms of the PSA, in evidence over Plaintiff’s objection, which required all intervening endorsements be affixed to the face of the note because there was ample room for endorsements on the face of the note. There is also no evidence the endorsement was affixed before the originator went out of business in 2008.

The Court also finds unclean hands in Plaintiff’s failure to comply with the Court’s Discovery Order of April 27, 2015.

17. In that order, the Court overruled plaintiff’s blanket objections and found no basis for Plaintiff to object to providing any discovery under Fla. Stat. 655.059.

18. The Court then ordered Plaintiff to provide (1) the final executed documents evidencing the chain of title for the subject loan; (2) all records of any custodian related to the chain of custody of the note; and (3) all records showing how and when the specific endorsement on the promissory note was created.

The Court fails to comprehend why Plaintiff would not fully comply with the Court’s Order compelling discovery when the evidence sought by the Defendant would actually assist Plaintiff in establishing the missing link in the chain of ownership in the endorsement and assignment of mortgage.

The Court hereby enters an Order to Show Cause why Plaintiff should not be Sanctioned for violating the Court’s order on April 27, 2015, after representing that it fully complied on or before January 14, 2016.

23. Moreover, the Court hereby enters an Order to Show Cause why Plaintiff should not be sanctioned for the reasons set forth in Defendant’s Motion for Sanctions Under the Court’s Inherent Contempt Powers for Fraud Upon the Court filed on March 16, 2016.

24. Defendant is hereby ordered to conduct further discovery in support of these orders to show cause and set an evidentiary hearing on them at the Court’s earliest convenience.

Ms. Keeley testified the loan boarding process involved two steps. First, Ocwen confirmed that the categories for each column of financial data from the prior servicer matched or corresponded to the same name Ocwen used for that same column of financial data. Second, Ocwen confirmed the figures from the prior servicer transferred over such that the top figure from Litton became the bottom figure for Ocwen. The court notes that when testifying about Ocwen’s boarding process, Ms. Keeley appeared to be merely repeating a mantra or parroting what she learned the so called boarding process is without being able to give specific details regarding the procedure itself. 1 Her demeanor at trial although professional, was hesitant and lacking in confidence in this court’s estimation as the trier of fact.

To support the court’s concern regarding the lack of foundation of the so called boarded records in this case, the Court takes Judicial Notice of the Consent Order entered in the matter of Ocwen Financial Corporation, Ocwen Loan Servicing, LLC by the New York State Department of Financial Services dated December 22, 2014. This Consent Order documents Ocwen’s practice of backdating business records that it failed to fully resolve “more than a year after its initial discovery.”

1 This Court estimates that it has presided over hundreds of foreclosure bench trials since being assigned to the Civil Division in 2011. The court has accordingly heard hundreds of bank witnesses testify regarding their company’s boarding process and has accepted thousands of documents into evidence pursuant to same. The boarding process and training of personnel regarding the boarding of documents varies greatly from one institution to another.

the Court noted that the first two default letters in the inch thick stack which Plaintiff sought to admit into evidence were inexplicably dated a week apart and had a $1,900 difference in the amount required to cure the default.

the admission of the default letters mailed by an outside entity not testifying in court creates a double hearsay problem as there is no evidence of a boarding process of that third party vendor’s mailing practices and procedures. Nor did the Ocwen representative testify that she had received training regarding the procedure used by the third party vendor in mailing the default letters.

Both the endorsement and the assignment omit the Depositor, Freemont Mortgage Securities Corporation, from the transaction which constitutes a fatal break in the chain of title.

The Court gives great weight as the trier of fact to the testimony of Defendant’s

expert witness, Kathleen Cully. Ms. Cully is a Yale Law School graduate that worked her entire career in structured finance transactions since 1985. She was extremely well versed in the Uniform Commercial Code. Among many other tasks and accomplishments, Ms. Cully testified that she led the Citigroup team that created the first pooling and servicing agreement ever. She led Citigroup’s Global Securitization strategy. The Court finds Ms. Cully eminently qualified as an expert witness in the area of securitized transactions and their interplay with the Model Uniform Commercial Code.

The Court applies Ms. Cully’s reasoned analysis as it relates to the note and mortgage for the subject loan and to Article 3 of Florida’s Uniform Commercial Code. However, it is axiomatic that all promissory notes are not automatically negotiable instruments.

This Court finds that the Note is non-negotiable as the amounts payable under the Complaint include amounts not described in the Note and as the Note does not contain an unconditional promise to pay.

66. The promise is not unconditional because the Note is subject to and/or governed by another writing, namely the Mortgage. Moreover, rights or obligations with respect to the Note itself—as opposed to the collateral, prepayment or acceleration—are stated in another writing, namely the Mortgage.

The Court grants Defendants’ Motion for Involuntary Dismissal and enters judgment in favor of the Defendants who shall go forth without day.

83. The Court reserves jurisdiction to award prevailing party attorney’s fees and to impose sanctions against Plaintiff under the inherent contempt powers of the court for fraud on the court, and such other orders necessary to fully adjudicate these issues.

84. Plaintiff is ordered to produce a corporate representative with most knowledge regarding its efforts to comply with the discovery order dated April 27, 2015, for deposition at the offices of Defendant’s counsel within 15 days from the entry of this order.


%d bloggers like this: