Mortgage Giant Accused Of Faking Documents To Justify Foreclosures
mortgagefraudblog.com | October 27, 2014 By Alan Pyke
New York state’s top financial regulator says one of the biggest mortgage servicing companies in America has continued to backdate paperwork in order to justify illegitimate foreclosures, more than two years after the widespread falsification of key foreclosure documents by financial companies was revealed and quickly resolved through a settlement with the federal government.
New York Department of Financial Services Superintendent Ben Lawsky says that Atlanta-based Ocwen Financial Corporation has been sending letters to homeowners long after deadlines for renegotiating their mortgages had passed. The dates on the letters say that they were sent well ahead of the deadlines, but Lawsky’s investigators say Ocwen’s own systems indicate the documents were created after the fact with incorrect dates printed on them. Worse, Ocwen was alerted to the improperly backdated documents by an employee nearly a year ago, according to the Wall Street Journal, but “ignored them for months and still hasn’t corrected them, nearly a year after they were initially found.”
By failing to provide struggling homeowners with timely information about their options, Lawsky’s investigation has found, Ocwen deprived thousands of people the opportunity to renegotiate their mortgages and improve their chances of keeping their homes. The new allegations are “the sixth time in the past two years that Mr. Lawsky’s office had raised questions about Ocwen’s business practices,” the Journal notes. The company’s stock price has fallen by more than half since the start of the year.
The newest alleged violations at Ocwen, which is the fourth-largest mortgage servicing company nationwide, share DNA with the widespread document falsification scandal that was dubbed “robo-signing” when it broke into headlines in 2010. The term refers to an illegitimate business practice whereby financial companies hired people to sign documents without actually verifying any of the information they contained.
Foreclosure laws are scrupulous about documents, and companies that wish to foreclose on a property have to be able to prove that they have legitimate ownership of the loan tied to the property and that they have jumped through a variety of legal hoops in the right order and within the proper timeframe. When the mortgage lending business went wild in the mid-2000s and then blew up during the financial crisis, the industry took shortcuts on hundreds of thousands of those important documents. Later, when firms noticed that it couldn’t prove to a judge that it had the proper paperwork on hand, many simply faked it.
Wells Fargo, the largest mortgage servicer in the country, allegedly had a formal process written down in an employee manual for how workers should go about ginning up missing documents to allow illegitimate foreclosures to proceed. In August, Lawsky’s office intervened to stop Ocwen from purchasing almost $40 billion in mortgages from Wells Fargo.
In early 2012, the Obama administration announced a nationwide blanket settlement of the robo-signing scandal with five banks including Wells Fargo, Bank of America, Citigroup’s mortgage unit, and JP Morgan. The National Mortgage Settlement was touted as a $25 billion deal that would bring relief to millions of wronged borrowers and discourage the industry from continuing the business practice. It has largely proven to be a farce, with banks flouting the terms of the deal repeatedly and Sen. Elizabeth Warren (D-MA) accusing Attorney General Eric Holder of “settling on the cheap” given the multi-trillion-dollar scope of the robo-signing fraud.
The $25 billion figure is itself misleading: just $3.5 billion of that was in the form of direct payments to wronged homeowners, with the rest being counted based on a variety of “consumer relief” actions that ultimately help the bottom line of the banks just as much as they help people stay in their homes. That relief reached far fewer borrowers than it was supposed to.
The settlement failed to produce real transparency about how the mortgage industry does business, too, after the independent foreclosure review system created in the settlement decided that it was more important to protect banks’ “trade secrets” than to give the public a full picture of the abuses. Before it was halted, the review had found a quarter-million wrongful foreclosures and 1.2 million homeowners who had successfully fought off an illegitimate foreclosure.
Holder’s broader record on financial industry enforcement is filled with similar episodes of deference to banks and legal settlements that are oversold in press releases and prove to be weaker than advertised once reality sets in.
Two and a half years after the federal settlement was announced, state regulators are still uncovering systematic falsification of documents by companies that made money foreclosing on borrowers who had their legal rights violated. Lawsky’s letter to Ocwen says that the newly-discovered backdating affected “potentially hundreds of thousands of letters to borrowers” and that the company’s shoddy internal systems mean that “it may be impossible to determine the scope of Ocwen’s non-compliance” with foreclosure laws. It also says that Ocwen’s inappropriate documentary practices have continued into 2014.
The ongoing foreclosure crisis costs the U.S. economy hundreds of billions of dollars in lost wealth each year. More than 8 million children have been affected. As a Consumer Financial Protection Bureau report showed early this year, the mortgage industry has not reformed its abusive practices to any meaningful degree.
Ocwen’s Alleged Foreclosure Document Fraud: How FRAUD STOPPERS Bloomberg Securitization Audit Can Help Affected Borrowers
New York state’s top financial regulator has revealed that Ocwen Financial Corporation, one of America’s largest mortgage servicing companies, has allegedly continued to engage in fraudulent practices by backdating paperwork to justify illegitimate foreclosures. These allegations come more than two years after a settlement was reached between financial companies and the federal government to address widespread falsification of key foreclosure documents. The latest revelations underscore the urgent need for solutions to protect homeowners’ rights. In this article, we will explore how FRAUD STOPPERS Bloomberg Securitization Audit can assist borrowers facing this issue.
The Ocwen Controversy:
According to the New York Department of Financial Services, Ocwen has been sending letters to homeowners after renegotiation deadlines had passed. While the dates on these letters indicate that they were sent ahead of the deadlines, investigations suggest that Ocwen’s own systems show the documents were created after the fact, with incorrect dates printed on them. Shockingly, an employee had reportedly alerted Ocwen to the improperly backdated documents almost a year ago, but the company ignored the issue and failed to rectify it.
Consequences for Struggling Homeowners:
Ocwen’s alleged fraudulent practices have had dire consequences for struggling homeowners. By withholding timely information about mortgage renegotiation options, the company has deprived thousands of people of the opportunity to improve their chances of keeping their homes. This is not the first time that Ocwen’s business practices have come under scrutiny, as the New York regulator’s office has previously raised questions about the company’s activities. Consequently, Ocwen’s stock price has plummeted by over half since the beginning of the year.
The Role of FRAUD STOPPERS Bloomberg Securitization Audit:
For borrowers facing the distressing situation of potential foreclosure due to fraudulent practices, FRAUD STOPPERS Bloomberg Securitization Audit can offer valuable assistance. The audit is a comprehensive investigation into a borrower’s mortgage loan to determine if any legal violations or irregularities have occurred during the securitization process. By analyzing the securitization chain and examining the transfer of the mortgage note, FRAUD STOPPERS aims to uncover any deficiencies or fraudulent activities that may provide grounds for legal action.
How FRAUD STOPPERS Can Help:
1. Identifying Legal Violations: FRAUD STOPPERS’ team of experts examines the securitization process to identify potential legal violations committed by mortgage servicers or other parties involved. This includes scrutinizing the transfer of the mortgage note, ensuring it adheres to legal requirements. If violations are found, borrowers may have a stronger case for defending against foreclosure actions.
2. Building Legal Strategies: FRAUD STOPPERS works with qualified attorneys who specialize in foreclosure defense and consumer protection laws. They use the audit findings to develop effective legal strategies to challenge the legitimacy of foreclosure actions and protect borrowers’ rights. This can include demanding loan modifications, pursuing legal remedies, or even filing lawsuits against the offending mortgage servicers.
3. Expert Testimony: FRAUD STOPPERS can provide expert witnesses who can testify on behalf of borrowers in court proceedings. These professionals possess extensive knowledge of securitization and foreclosure processes, bolstering the borrowers’ arguments and increasing their chances of achieving a favorable outcome.
4. Empowering Borrowers: One of the key advantages of FRAUD STOPPERS is that it empowers borrowers with information about potential violations and irregularities in their mortgage loans. Armed with this knowledge, homeowners can take proactive steps to protect their interests, engage with legal professionals, and navigate the complex foreclosure landscape with confidence.
The allegations of Ocwen’s continued backdating of foreclosure documents highlight the urgent need for effective solutions to protect homeowners’ rights. FRAUD STOPPERS Bloomberg Securitization Audit offers a valuable resource for borrowers facing potential foreclosure due to fraudulent practices. By identifying legal violations, building strong legal strategies, providing expert testimony, and empowering borrowers with information, FRAUD STOPPERS can help affected individuals defend against illegitimate foreclosure actions and seek appropriate remedies. It is crucial for borrowers to be aware of their rights and explore options like the FRAUD STOPPERS audit to safeguard their homes and financial well-being.