Home » NEWS » Banking & Finance » Mississippi, other states order mortgage firm to cease and desist

Mississippi, other states order mortgage firm to cease and desist

 

By JACK WEATHERLY

Mississippi and more than 20 other states have issued cease and desist orders against Ocwen Loan Servicing, LLC, the nation’s second-largest nonbank mortgage firm, which the federal Consumer Financial Protection Bureau contends in a separate legal filing is guilty of “years of widespread errors, shortcuts and runarounds” that have cost some borrowers money and others their home.

The Mississippi Department of Banking and Finance ordered Florida-based Ocwen to immediately cease acquiring or originating residential mortgages until the company can prove that consumer funds are appropriately collected, properly calculated and disbursed accurately and in a timely fashion.

“People have no choice of the mortgage servicer that handles their loan, and yet the servicer’s misconduct can cause families to lose their homes,” Lauren Saunders, associate director of the National Consumer Law Center, said in a release from the Department of Banking and Finance. “That is why vigilance by the CFPB and state regulators is so important to send a message to financial service providers that misconduct will not go unpunished.”

Ocwen has filed suit in federal court contending that the CFPB is unconstitutional, according to the South Florida Business Journal.

“A three-judge panel of the D.C. appeals court ruled in October that the CFPB had an unconstitutional structure. The full appeals court will hold a hearing on this issue on May 24,” the Journal reported.

“The Consumer Financial Protection Bureau (CFPB) is a valuable partner to states and helps them protect consumers from financial abuses,” said Saunders. “Any attempt to weaken the CFPB leaves families in Mississippi and across the nation vulnerable to violations of their rights.”

Ocwen said in a release that “the CFPB suit is primarily based on the CFPB’s flawed review of data and its self-serving conclusion about isolated instances where Ocwen self-identified ways we can do better.

The South Florida Business Journal reported that “the company signed a $2.1 billion settlement with 49 states and the CFPB in 2014 and promised to correct problems with its mortgage services. The new lawsuits allege that Ocwen did not comply with much of that agreement and the company willfully disregarded advice from regulators about how to update its technology to correct these problems.”

A multistate mortgage committee, composed of officials in Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington, identified several violations of state and federal law.

The committee looked at Ocwen’s records from Jan. 1, 2013 to Dec. 7, 2016 and concluded that the firm had mismanaged escrow accounts set up to fund taxes and insurance.

About Jack Weatherly

Leave a Reply

Your email address will not be published. Required fields are marked *

*