Ocwen and Bondholders Clash Over Mortgage Services
A foreclosed house in McLean, Va., in 2009.
Shawn Thew / European Pressphoto Agency
By MICHAEL CORKERY
January 26, 2015
The embattled subprime mortgage servicer Ocwen Financial is accusing a group of mortgage-bond investors of pushing for fast foreclosure and objecting to principal reductions on billions of dollars in mortgages.
I allege that, the mortgage servicer have been doctoring mortgage assignments and testaments all over the country, fabricating documents in a very wide variety of ways for many years, foreclosing on homes with back dated letters and just ordinary fraudulent illegal practice.
The criticism comes after the bondholders released a statement late on Friday complaining that Ocwen had failed to adequately service mortgages. The statement suggested that the bondholders would take some form of legal action against the company.
Remember the trustee were the front runners for the shoddy mortgage originators up until 2007, when companies like Ameriquest issued in a masterful fashion every kind of predatory mortgage loan based on every NINJA property possible. Ocwen acquired the servicing rights knowing it was getting a cat in a bag, the bond holders also bought bad paper and they too knew that the cat was in a bag, they just did not think it would get out.
In a letter to the bondholders’ lawyer, Ocwen’s lawyer Richard A. Jacobsen said the group’s “ultimate objective” was to “stop servicers from modifying loans and force them to foreclose on and evict as many homeowners as quickly as possible.”
I allege that this statement by this lawyer is of a psychopathic nature as Ocwen has no intention as Ocwen has no intention of modifying any loan or giving any principle reduction, it simply fabricates any attestation, power of Attorney, Assignment of Mortgage or any court paper to evict the homeowner, the history have shown this since 2006, the record is clear I have seen affidavits, which were totally illegitimate and totally illegal filed in Bankruptcy cases in many Jurisdictions
Mr. Jacobsen, of the law firm Orrick, Herrington & Sutcliffe, said the investors, including “certain hedge funds,” also continue to object to the use of principal reductions in the national mortgage settlement that federal authorities had reached with multiple banks and financial firms. Mr. Jacobsen said Ocwen’s national mortgage settlement allows for principal reductions, which are often the most effective way to help struggling homeowners avoid foreclosure.
Here the company Ocwen is making a false endeavor to ride on on the backs of the “ struggling homeowners” to pretend that they are in-fact being the good guys, this is pure delusion, I allege, Ocwen has a history of homeowner abuse, mind you they are not the only devils in the mortgage scam hell, but they are one of the big ones.
But Kathy Patrick, a lawyer for the bondholders said in a statement on Monday that “Ocwen’s claim that investors are seeking to accelerate foreclosures is false.” She added, “For several years, these investors have been advocates for prudent, prompt, and competent modifications and were industry leaders in establishing modification protocols — that predated the National Mortgage Settlement — to ensure prudent modifications could and would be done.”
I actually am apt to believe Kathy Patrick more than Ocwen as the Pooling and Servicing Agreement has a stated provision for mortgage reduction and loan modification based on perceived potential losses. The bond holders were told that about 15% of the loans may default in the Prospectus of the Pooling and Servicing agreement. Homeowners have long allege that the bond holders would get insurance and tax incentives and payouts to modify the loans or to write them down.
Underlying the dispute is a simmering tension between bondholders and the companies, like Ocwen, that service the mortgages bundled into the bonds. Servicers are supposed to help the investors realize the greatest value from the bond, which can be achieved through foreclosure in some cases or modifications in others.
Rarely does such tension boil over into public. But on Friday, the law firm Gibbs & Bruns, which represents investors in 119 mortgage bonds serviced by Ocwen, released a statement accusing the company of failing to perform its duties.
The company is between a rock and a hard place, the rock is that the loan origination was shoddy from the start, the Trustee knew this, Ocwen knew this but they entered into a Pooling and servicing agreement that simply, they, could not comply with. The trustee may have entered into table funding with the originators, banking on the jaded Judicial system and the foreclosure mills to deliver the defaulted loan and not face counter claims by the borrower, but a strange set of occurrences occurred and the homeowners fought back with the support of the CPFB and other stated black letter law. Now the bond holder may have stepped into the shoe of the Originator and may be faced with some stiff counter claims by borrowers.