Ocwen moves up JDPower rankings, from dead last to next to last

Ocwen Loan Servicing moved up slightly in JDPower’s annual ratings of customer satisfaction with their mortgage companies, which were released late Thursday.

Ocwen placed next to last in the 2017 ranking, up from dead last in 2016. Ocwen scored 661 on the 1,000-point rating, well below the industry average of 754.

The unit’s parent, West Palm Beach-based Ocwen Financial, has been roiled by years of regulatory actions and consumer complaints. This week, a nonprofit advocacy group accused Ocwen of neglecting foreclosed homes in black and Hispanic neighborhoods.

Ocwen: Auditor ripped us off with phantom hours, expenses from strip clubs and casinos

Embattled mortgage firm Ocwen Financial says Fidelity Information Systems has ripped it off for millions by overbilling Ocwen to monitor the company’s loan portfolio.

In a lawsuit filed in May in Sacramento, California, Ocwen says Fidelity Information Systems charged for phantom hours and sought reimbursement for expenses incurred at strip clubs and casinos.

West Palm Beach-based Ocwen was hit with a spate of devastating regulatory actions in late April, headlines that caused Ocwen’s shares to lose half their value. Ocwen has lashed back, first by suing the U.S. Consumer Financial Protection Bureau for overreach, and now by taking Fidelity Information Systems to court.

In 2015, the California Department of Business Oversight forced Ocwen to hire Fidelity Information Systems as an independent auditor charged with making sure Ocwen wasn’t ripping off homeowners.

Instead, Ocwen says, it was the one that was fleeced. According to its suit:

“FIS was retained to conduct a two-year review of Ocwen’s loan servicing practices in June 2015, at a budgeted-cost of $44.8 million. Throughout the engagement, FIS made fraudulent or negligent misrepresentations in its monthly invoices to Ocwen about the services FIS claims to have performed and the expenses FIS claims to have incurred. 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. 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.”

As for the strip clubs, Ocwen alleges:

“During the engagement, FIS associates working at multiple worksites 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. On information and belief, FIS’s policies prohibit expensing meals at these types of establishments.”

Fidelity Information Services called the allegations bogus.

“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,” spokeswoman Rachel Gerber told National Mortgage News.

Fidelity Information Services is a unit of Jacksonville-based Fidelity National Financial.

MORE OCWEN COVERAGE

In sweet deal for billionaire chairman, Ocwen buys Bill Erbey’s house for $2 million premium

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

What big peers you have! For CEO pay, Ocwen compares itself to large companies

Ocwen CEO’s pay nearly doubles in 2016

Ocwen: CFPB enforcement action should be thrown out because federal agency is “unconstitutional”

 

Ocwen’s West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.

Ocwen Financial, the embattled mortgage company, joins the long list of critics of the Consumer Financial Protection Bureau.

Former President Barack Obama created the CFPB as part of an initiative to reign in a financial industry that had gone off the rails. Conservatives and Wall Street have repeatedly bashed the CFPB as an anti-business agency, and there’s speculation that it won’t survive President Donald Trump.

“Ocwen believes that the CFPB is unconstitutionally structured because it vests too much unfettered power in the hands of the CFPB’s director and the bureau itself, without any meaningful oversight by the president or Congress,” Ocwen said in a statement.

Last week, shares of West Palm Beach-based Ocwen cratered after states and the CFPB launched enforcement actions against the company, which for years has been the subject of complaints about bogus foreclosures and shoddy practices.

“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.”

Ocwen says the CFPB is overreaching, and the company points to Trump’s unenthusiastic view of the agency as a motive.

“Ocwen gave its full cooperation to CFPB,” the company said in a court filing. “However, in the wake of the election of the new president, CFPB pressured Ocwen to resolve the matter on the basis of wholly unreasonable settlement terms. When Ocwen refused to do so, this lawsuit followed.”

Even if Ocwen defeats the CFPB action on grounds of constitutionality, the company faces other regulatory problems. Florida Attorney General Pam Bondi also filed a suit last week making similar allegations against Ocwen. She’s a conservative and, presumably, no fan of the CFPB.

In another action released last week, North Carolina’s banking examiner led a 20-state cease-and-desist order that barred Ocwen from taking on new business. In the order, North Carolina Commissioner of Banks Ray Grace said he and other state regulators insisted that Ocwen reconcile escrow accounts for 2.5 million homeowners.

Ocwen’s response? Doing so would cost $1.5 billion. But Ocwen did offer to reconcile 457 accounts, a fraction of a fraction of a percent of the loans it services.

“Ocwen has consistently failed to correct deficient business practices that cause harm to borrowers,” Grace said in a statement. “We cannot allow this to continue.”

MORE OCWEN COVERAGE

In sweet deal for billionaire chairman, Ocwen buys Bill Erbey’s house for $2 million premium

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

What big peers you have! For CEO pay, Ocwen compares itself to large companies

Ocwen CEO’s pay nearly doubles in 2016

 

Ocwen’s customer service: Still dead last, but not as bad as it once was

When JDPower released its customer satisfaction ratings for mortgage servicers last year, Ocwen once again ranked dead last.

West Palm Beach-based Ocwen — which was hammered Thursday by federal and state regulators for shoddy customer service — routinely ranks last or dead last in JDPower’s customer service ranking.

In one bit of improvement, Ocwen has narrowed the gap a bit between its score and the industry average since 2010.

MORE OCWEN COVERAGE

In sweet deal for billionaire chairman, Ocwen buys Bill Erbey’s house for $2 million premium

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

What big peers you have! For CEO pay, Ocwen compares itself to large companies

Ocwen CEO’s pay nearly doubles in 2016

Hidden cameras in the women’s bathroom, DMX raps, billion-dollar enforcement actions and other high drama from Ocwen

Ocwen’s Atlanta mansion: Sweet deal for Bill Erbey

To the uninitiated, the phrase “subprime mortgage servicer” sounds deadly dull. To followers of West Palm Beach-based Ocwen Financial Corp., the sobriquet evokes high drama of the sort that unfolded Thursday, when Ocwen shares cratered amid an onslaught of federal and state lawsuits.

Ocwen (that’s “new co” backwards, if you didn’t know) has elicited consumer complaints in eye-popping numbers.

“Since April 2015, Ocwen has received more than 580,000 complaints and written notices of error from more than 300,000 different borrowers,” the federal Consumer Financial Protection Burea said in its suit.

But Thursday’s headlines were just the latest in the company’s two-decade history. Other lowlights:

Hidden camera shooting up women’s skirts. In 1999, police arrested an Ocwen employee and found on his video camera footage from a hidden camera placed under a desk in the company’s West Palm Beach mailroom. Two of the women who appeared in the video sued, saying they were harassed at work even after the cameraman was fired. In 2005 they won $1 million settlements after a jury trial in Palm Beach County Circuit Court. They said that in addition to the under-the-desk camera, they also saw a man’s hand moving ceiling tiles in a women’s bathroom. Their complaints to management went unheeded, the women said.

“Y’all gon make me lose my house.” In 2008, about 30 protesters crowded into the lobby of Ocwen’s offices, where they chanted to the tune of the DMX song: “Y’all gon make me lose my house, up in here, up in here.” The protest was sparked in part by Ocwen’s rep for losing homeowners’ payments and making them wait on hold for hours. Another spark: A Government Accountability Office report said Ocwen, as the property manager for thousands of foreclosed homes owned by the U.S. Department of Veterans Affairs, neglected maintenance and charged taxpayers for repairs that weren’t made.

A sweet deal for the billionaire chairman. In a generous perk for its chairman, Ocwen in 2012 bought William Erbey’s Atlanta mansion for $2 million more than he paid at the peak of the housing market. Ocwen paid $6.48 million for Erbey’s house in so he could move to the tax haven of St. Croix. “It is really ironic that a company that is a subprime mortgage processor would give a sweet deal to its executive chairman that its own customers couldn’t get,” Vineeta Anand, chief research analyst at the AFL-CIO’s Office of Investment, said at the time. Ocwen put the mansion on the market for less than it paid. Ocwen finally unloaded the house in 2016 for $3.6 million — a 44 percent haircut.

The $2 billion fine that cost only $67 million. In late 2013, federal and state regulators hit Ocwen with a $2.1 billion settlement for cheating homeowners. But investors shrugged off the news. Ocwen told the Securities and Exchange Commission its actual cost to settle the regulatory action would be about $67 million.

What big peers you have! For CEO pay, Ocwen compares itself to larger companies

Like most publicly traded companies, Ocwen Financial compares itself to a peer group to help determine how much to pay executives.

In an unusual twist, the West Palm Beach-based mortgage company considers as peers a group of much larger companies. Before the stock market opened Monday, Ocwen’s market cap was about $660 million.

Among the 18 peers listed in Ocwen’s proxy filed Monday, just one, Walter Investment, is smaller. Another, PHH, is about the same size. The other 16 are much larger — including People’s United Financial and Carlyle Group, which have market values nearly 10 times that of Ocwen.

“The market review for the President and Chief Executive Officer was determined by selecting a peer group of companies for comparison that were recommended to the Compensation Committee by FW Cook & Co. based on an assessment of industry, the extent to which they compete in similar labor markets and for capital, the comparability of the scope and complexity of their operations and their market capitalization, among other metrics,” Ocwen said in its proxy.

Ocwen said CEO Ron Faris made 81 percent more in 2016 than in 2015, despite a 23 percent drop in the stock price for the year.

MORE OCWEN COVERAGE

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

 

Ocwen CEO’s pay nearly doubled in 2016

Ocwen Financial, the embattled mortgage company, had another tough year in 2016. Shares fell 23 percent. Revenue dropped to $1.39 billion, down from $1.74 billion in 2015, and the company lost $200 million, compared to a net loss of $247 million in 2015.

Even so, Chief Executive Ron Faris’ compensation package nearly doubled. He made $3.98 million in 2016, up from $2.2 million in 2015, Ocwen (NYSE: OCN) said Monday in its proxy statement.

That includes a salary of $875,000, incentive compensation of $1.35 million and stock valued at $1.76 million (although Faris’ actual profit from the stock award is likely to vary from that amount).

“These awards represent the first equity awards granted to Mr. Faris in eight years,” the company said in its regulatory filing.

Meanwhile, former Ocwen Chairman William Erbey continues to see his fortunes dwindle. His 21 million shares of Ocwen, once worth more than $1 billion, are worth $115 million as of Monday’s market opening.

Erbey’s 6 million shares of Altisource Portfolio Solutions, a Luxembourg-based spinoff of Ocwen, are worth $235 million. Erbey once had a billion-dollar stake in Altisource, too.

MORE OCWEN COVERAGE

In sweet deal for chairman, Ocwen buys Bill Erbey’s house for $2 million premium

What big peers you have! For CEO pay, Ocwen compares itself to much larger companies

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

Ocwen spinoff says federal agency considering an enforcement action

Ocwen's West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.
Ocwen’s West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.

In yet another regulatory entanglement for Ocwen and its spinoffs, Altisource Portfolio Solutions said Thursday that the U.S. Consumer Financial Protection Bureau is investigating Altisource’s dealings with West Palm Beach-based Ocwen.

In its annual report, Luxembourg-based Altisource said it learned in November of the inquiry by the CFPB.

“The CFPB is considering a potential enforcement action against Altisource relating to an alleged violation of federal law that primarily concerns certain technology services provided to Ocwen,” Altisource said in its regulatory filing.

Altisource (Nasdaq: ASPS) said it responded to the federal agency in December with a letter outlining why “an enforcement action is not warranted.” The company doesn’t describe which technology services are in question.

Among other things, Altisource runs Owners.com and manages properties. Ocwen (NYSE: OCN), which collects payments for subprime mortgages, has been hit with a variety of fines in recent years and Chairman Bill Erbey, a former Palm Beach resident, was pushed out.

 

Ocwen slammed by Treasury’s special inspector

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Ocwen Financial Group long has been a punching bag for regulators, and the West Palm Beach-based loan servicer finds itself taken to task again in a quarterly report from the U.S. Treasury Department’s Special Inspector General for the Troubled Asset Relief Program.

Released Friday, the report’s summary of Ocwen’s performance spans just over a page, and includes nine uses of “wrongfully,” along with one instance each of “improperly,” “misconduct” and “mismanagement.” Among the findings:

“Treasury continued to find in 2014 through 2016 that Ocwen wrongfully cancelled homeowners out of [the Home Affordable Mortgage Program]. More than 127,000 homeowners who were in a HAMP modification with Ocwen have fallen out of HAMP. Ocwen was paid in excess of $725 million through HAMP for these cancelled homeowners. More than 30,000 of these homeowners went into foreclosure or otherwise lost their home.”

“Treasury has found that Ocwen wrongfully cancelled people out of HAMP based on Ocwen’s own misconduct similar to the conduct in Ocwen’s enforcement action. Ocwen cancelled homeowners out of HAMP finding that they had missed three payments, when in reality homeowners made the payments, but Ocwen held mortgage payments in suspense, improperly reversed and later reapplied mortgage payments, and did not timely post payments made to an Ocwen lockbox. Treasury does not know how many homeowners Ocwen has wrongfully cancelled out of HAMP.

“Ocwen’s denial of 68 percent of those who applied for HAMP should be looked at through the lens of the enforcement action which found that Ocwen ‘improperly denied loan modifications.’”

“With Treasury contracted to pay up to another scheduled $2.2 billion and possibly an additional $941 million to Ocwen, continued oversight over these billions of dollars and this program remains critical.”

UPDATE: Ocwen offers this statement:

“Ocwen led the industry in HAMP modifications during the life of the program, and we are extremely proud of our performance and our success. As of September 2016, Ocwen has helped 330,000 struggling borrowers remain in their homes under the HAMP program. We took our participation in the HAMP program very seriously and made significant investments in our risk and compliance management infrastructure in that time.

Under the umbrella of The U.S. Department of the Treasury, we believe the HAMP program has been successful in keeping borrowers in their homes and has executed rigorous oversight over servicers.  

We remain committed to working with distressed borrowers to find the right loan modification to allow them to keep their homes while continuing to provide cash flow for loan investors. There is no doubt that a homeowner whose loan is serviced by Ocwen has a much better chance of avoiding foreclosure than if their loan is serviced by any other large mortgage servicer. This has been confirmed by independent third-party studies, which consistently illustrate that Ocwen has a superior record helping borrowers bring their payments current, stay current, and repay their mortgage. This is a record we are proud of.”

Ocwen shares surge on upgrade

Ocwen's West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.
Ocwen’s West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.

Ocwen Financial got a rare bit of good news on Tuesday afternoon, and shares surged 15 percent.

Ocwen coverage

Ocwen ranks dead last in J.D. Power survey

Ocwen pays $30 million in latest legal settlement

Ocwen Chairman Barry Wish resigns, replaced by former regulator

The West Palm Beach-based mortgage company said Standard & Poor’s raised six of its ratings to “average” from “below average.”

“We believe S&P’s conclusions reflect the significant progress Ocwen has made in enhancing our control functions, and strengthening the company’s governance and financial condition,” the company said in a statement.