Just several weeks ago, the national media reported that Ocwen Mortgage joined its crooked Wall Street Bank brethren in the mortgage servicing business by agreeing to a $2.1 billion settlement with the U.S. Government and 49 State Attorney Generals as a penalty for its fraudulent loan servicing and foreclosure practices. Mortgage Servicing is the business of collecting the homeowner’s monthly mortgage payments and
ensuring the real estate taxes and insurance are paid. A loan servicer is not the owner of the loan, but simply an intermediary which is paid a fee for providing its service. In today’s world of securitized lending, virtually all home loans are serviced by an entity which is not the lender.
Realizing that chances are the party collecting your mortgage payments is not your lender and has no ownership interest in your loan is a critical first step for every homeowner struggling for mortgage relief. The next step is realizing that your loan servicer actually makes more money when you stop paying on your mortgage. This is so since the servicer is paid a percentage of your loan balance. If interest and late charges are added to the loan, the amount you owe is increased, and so is the servicer’s compensation. This system actually disincentivizes the servicer from working with the homeowner to grant mortgage relief allowing him or her to save the home, and is part of the reason we have preached so often that, generally speaking, foreclosure is profitable for banks.
Thus, it was not surprising in the least to see that Ocwen’s fraudulent practices have begun to catch up with it when it was forced to ante up $2.1 Billion in its government settlement. Unfortunately for the many homeowners with Ocwen mortgages, Ocwen hasn’t really learned its lesson yet. This fact is evidenced by the experience of our Clients Dave and Denise. They came into our office recently with a foreclosure Complaint filed against them by Ocwen. One glance at the documents attached to the Complaint, particularly the mortgage note, revealed the claim was entirely bogus in that Ocwen had fraudulently manufactured paperwork. Without question, we will use this fatal flaw to Dave and Denise’s great advantage. In the meantime, the lesson in Dave and Denise’s Story for every homeowner with an Ocwen mortgage is to be on the lookout for fraud because Ocwen clearly hasn’t learned its lesson yet.
Note from the author: If you have questions or comments- regarding this or any Foreclosure Story article or should you like to have a “free mortgage analysis”, please visit www.mcgookeylaw.com, visit us on Facebook or call us at 419-502-7223.
Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2014 Daniel L. McGookey