Homeowners Allege Illegal Fees, Foreclosure, in Ocwen Class Action
But a class-action lawsuit filed against Ocwen alleges that it has a pattern and practice of charging illegal late fees, causing unnecessary foreclosures.
Owen is the largest servicer of subprime mortgages in the United States. Subprime mortgages are mortgages that are made to individuals with poor credit histories who are not typically able to qualify for conventional mortgages.
Ocwen was subject to a settlement last year with 49 state attorneys general, as well as the Consumer Financial Protection Bureau, in which it was alleged to have engaged in abuses including robosigning. Under the settlement, Ocwen was required to provide loan modifications and principal reductions to at-risk homeowners, as well as payments to homeowners who lost their homes in illegal foreclosures.
The new Ocwen lawsuit states that “when Ocwen takes over loans, it routinely breaches the loan agreements by, among other things, improperly charging late fees, overcharging for force-placed hazard insurance and default and delinquency related services, failing to honor its obligation to maintain escrow accounts and charging for purported advances made by other servicers after acquiring servicing portfolios without adequate proof or basis for those charges.”
Ocwen’s business model, the lawsuit alleges, it to “maximize revenues from loans in default without regard to whether it has a legal basis for the amounts it claims due” in order to “defraud homeowners” and enrich Ocwen and its president, William Erbey.
Homeowners in Massachusetts who believe that they have been charged illegal fees, deprived loan modifications, or illegally foreclosed upon, may have rights under the Massachusetts Consumer Protection Act, called Chapter 93A, and should consult an attorney.
The complaint is available here: Hopkins v. Ocwen