The story the Roy’s told us several weeks ago was not at all unusual in its nature, only in its degree. The bottom line is that their loan servicer, Ocwen Financial, failed to give them credit for payments made on their loan. This method of mortgage fraud is unfortunately very common. What makes the Roy’s case different is the scope of the fraud. It appears that the amount the Roy’s are being overcharged by Ocwen could very well be in the tens of thousands of dollars. The seeds of the Roy’s problem were sown in 2011. With Mrs. Roy being permanently disabled, the Roy’s began to have mortgage issues. Like millions of American homeowners similarly situated, they did what they thought was the right thing by reaching out to their loan servicer, Saxon Mortgage at the time, for mortgage relief. Eventually, they approved for an award of $10,000 of funds through the Save the Dream Program, an amount which would bring their mortgage current.
At that point, the Roy’s thought their mortgage nightmare was over. Unfortunately, such was not to be the case. Just as the Government was preparing to pay over the $10,000 reinstatement funds to Saxon on the Roy’s loan, as fate would have it, Ocwen entered the picture as the new servicer of the loan, replacing Saxon. With that, $10,000 vanished! Whether Saxon ever actually received the money is still unclear. What we do know is that Ocwen never credited the Roy’s mortgage, as within two months after the payment was to be made, it sent the Roy’s a notice of default. Dismayed, but not deterred, the Roy’s sent in mortgage payments to Ocwen for the next six months, all of which payments were accepted by Ocwen. However, Ocwen refused to give them any plausible answer as to how and why they were still being considered to be delinquent on their loan. In addition, Ocwen refused to cooperate with them in providing them with relief on their 7.6%
under other government programs such as HAMP. Because of this, the Roy’s stopped making their payments.
The Roy’s have yet to be sued for foreclosure. Most often, with people such as the Roy’s, we would recommend the “proactive approach”. That is, we would suggest going back at the loan servicer aggressively, calling them out on their fraud, with the goal being to head off foreclosure altogether. In the Roy’s case, because of the rather unusual circumstances, we decided the best course of action was simply to lay in wait for the inevitable foreclosure to come. At that time, the Roy’s will be armed to defend the action by pointing out the fraud mentioned above. Further, should Ocwen have falsely reported the Roy’s as being delinquent on their loan, not recognizing the payments that were made, as is probably the case, a counterclaim under the Fair Credit Reporting Act will almost certainly follow. Between all the legal claims and defenses the Roy’s will assert, Ocwen could easily find itself in very hot water. We can’t think of a more fitting be for Ocwen to be.
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Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2014 Daniel L. McGookey