We’ve posed the question previously in this column whether the fantastic mortgage relief settlements achieved by our clients with their loan servicer Ocwen, may have been connected with its recent public admission of widespread mortgage fraud by virtue of its agreement with the federal government to pay $2.2 billion in fines and damages as restitution for such misconduct. To state the question another way; “Did those mortgage relief settlements indicate that Ocwen truly recognized the error of ways, and was taking the proper measures to correct the situation?” The Dwight’s Story would certainly seem to suggest that it hasn’t.
The Dwights have been struggling with Ocwen for years to get their mortgage issues resolved. According to the Dwights, Ocwen demonstrated a pattern of holding onto their monthly mortgage payment, made on time, until after their grace period expired, resulting in unwarranted late fees being assessed. Over the years, this form of misconduct, which we generally label “Servicing Fraud”, caused the Dwights to have thousands of dollars of unjustified charges being tacked onto their loan balance. Being unable to get this situation straightened out, the Dwight’s eventually stopped paying on their mortgage, waiting for the eventual foreclosure shoe to drop.
That happened just last week. In fact, they received one of their copies of the summons and foreclosure Complaint on Mrs. Dwight’s birthday. And given the horror which Ocwen has put them through over the years, that Complaint is the best birthday present she could have received. I say that for two reasons. Because her good faith attempts at resolving the controversy had been rejected for years, it was obvious that the only way for the Dwight’s to finally bring the matter to a head was through litigation. We always advocate to our clients to be proactive in their cases; to not wait for the foreclosure to come, and do everything possible to straighten things out and avoid it altogether. Most of the time this approach works, saving the homeowner thousands of dollars, and more importantly, immeasurable heartache and frustration.
Unfortunately for the Dwights, the proactive approach proved to be unsuccessful. However, good things come to those who wait as they say, and it certainly has for the Dwight’s. The second reason the Complaint is great news for the Dwights is that it is totally fraudulent on its face. The suit was brought by U.S. Bank, as Trustee for a 2007 Trust, with Ocwen acting as its agent. However, the two assignments of mortgage attached to the Complaint, both executed by Ocwen, are bogus and of no effect whatsoever. More importantly, a third assignment of mortgage, executed by Ocwen in 2004, in favor of Wachovia Bank, as Trustee of a 2000 Trust, and recorded that same year, is not attached to the Complaint.
The reason this third assignment is important is that it represents a complete and fatal break in the chain of the title to the mortgage as to the Plaintiff in the case, U.S. Bank, Trustee. In other words, without question, U.S. Bank had no right to bring the foreclosure action, and Ocwen, which brought the action on behalf of U.S. Bank, had to have known this fact, since it executed the missing assignment in favor of Wachovia Bank in 2004. Poor Ocwen, caught dead to rights in its own fraud! Clearly, this sort of egregious fraud leads any reasonable person to wonder whether Ocwen has any intention ever of cleaning up its act. In the meantime however, this time around Ocwen will pay dearly for its transgressions against the Dwights, with Mrs. Dwight getting a well-deserved birthday present in the form of great mortgage relief.
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Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2014 Daniel L. McGookey