Ocwen slapped with federal, state lawsuits alleging “widespread errors, shortcuts, and runarounds”

Add a couple more headaches to Ocwen Financial’s list of woes. Federal and state regulators on Thursday filed suits against the mortgage servicer. Shares of West Palm Beach-based Ocwen, already battered, plunged more than 50 percent Thursday afternoon.

In one devastating blow, North Carolina led a group of 20 states in barring Ocwen from taking on new business until it proves that it accurately records escrow payments. Meanwhile, echoing years of gripes from borrowers, the federal Consumer Financial Protection Bureau slammed Ocwen’s practices.

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“The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes,” the CFPB said. “Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

While the CFPB, an Obama-era creation, is a favorite target of Republicans pointing to regulatory overreach, Ocwen seems to have run afoul of overseers on both sides of the aisle: Also Thursday, Pam Bondi, Florida’s staunchly Republican attorney general, sued Ocwen.

Bondi says Ocwen fleeced Florida borrowers by “filing illegal foreclosures, mishandling loan modifications, misapplying mortgage payments, failing to pay insurance premiums from escrow and collecting excessive fees.”

“Since 2014, when we first entered the multistate settlement with Ocwen, we have listened to Ocwen’s promises that they would ‘right the ship’ and resolve the improper mortgage servicing and foreclosure misconduct that has plagued it,” Bondi said in a statement. “Enough is enough. Florida’s distressed Ocwen borrowers should no longer have to endure costly servicing errors and unfair practices.”

In a third suit, the state of North Carolina’s banking commissioner barred Ocwen from expanding its service operations in the state. Mortgage servicers collect loan payments and keep escrow accounts on behalf of borrowers.

Ocwen, for its part, called the CFPB’s allegations “inaccurate and unfounded.”

“Ocwen strongly disputes the CFPB’s claim that Ocwen’s mortgage loan servicing practices have caused substantial consumer harm,” the company said in a statement. “In fact, just the opposite is true. Ocwen believes its mortgage loan servicing practices have and continue to result in substantial benefits to consumers above and beyond other mortgage servicers.”

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