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Ocwen’s Troubled Past with Tracking Mortgage Payments and Escrow Balances

If you happen to have Ocwen as a mortgage servicer (or former servicer), you may have an excellent reason to challenge their books.  Check out this quote from an Eleventh Circuit Court of Appeals case out this week in University of Puerto Rico Retirement System et al v. Ocwen et al.

“Unfortunately for Ocwen, REALServicing didn’t really work—the software, as it turned out, was incapable of properly tracking borrowers’ accounts and payments, and it recorded inaccurate information about interest, late fees, escrow accounts, or completed payments for up to 90% of the loans in the system.”

90% of their loans were not properly accounted for!  Wow that’s pretty bad!

Ocwen services more than 1.2 million loans with a balance over $200 billion.  To manage all that, they used their own proprietary software, REALServicing, to administer the loans.  Employees weren’t trained on what codes to use among more than 10,000 comment codes and flags.  Maybe this is one of the reasons why when you call a servicer for information, you tend to get different answers from different reps.  Even worse, the system was simply out of order and not available for long periods of time.  Even if the account was accurate, which apparently wasn’t very often, the software would spit out error codes.  However, despite the obvious problems, including actions by the CFPB and 31 states, it took Ocwen several years to move away in late 2017 from REALServicing to Black Knight’s LoanSphere MSP servicing system.

This opinion and the prior CFPB lawsuit reveal that even Ocwen’s own former Head of Servicing described their system as “an absolute train wreck”.  We’ve followed the trail of tears over the past several years with multiple consent orders, audits, regulatory actions and fines, SEC filings, investor calls and even press releases.

If this rings a bell with you, you might want to speak with an experienced mortgage and foreclosure attorney about your mortgage.

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