N.Y. Regulator: Ocwen Backdated Denial Letters to Homeowners Seeking Mortgage Modifications

Ocwen Financial, one of the largest U.S. mortgage servicers, wrongfully denied hundreds of thousands of borrowers mortgage modifications, many of them seeking to prevent foreclosure, New York’s financial regulator revealed Tuesday.

Ocwen “caused significant harm” to these homeowners by backdating denial letters in response to proper requests for lower monthly payments, the regulator said.
Mortgage modifications, or monthly payment reductions, have saved millions of homeowners across the country from losing their homes . But many mortgage servicers have settled with state and federal authorities since the financial crisis because of deficiencies or wrongdoing in foreclosure-prevention practices.
Ocwen had been under scrutiny by New York’s Department of Financial Services for its loan-servicing problems.
Benjamin Lawsky, N.Y. Superintendent of Financial Services, said in a letter to Ocwen’s general counsel, Timothy Hayes, that Ocwen has  ignored the backdating issue even after being alerted to it.  Ocwen has yet to resolve the matter and Lawsky is demanding that the company “fix its systems without delay.”
“In many cases, borrowers received a letter denying a mortgage loan modification, and the letter was dated more than 30 days prior to the date that Ocwen mailed the letter,” writes Lawsky in the letter to Ocwen’s general counsel. “These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter.”
Even worse, the regulator writes, Ocwen “did nothing” to investigate the backdating issue when employees questioned the accuracy of the dates.
Ocwen and most U.S. mortgage servicers are under obligations under both New York and federal law, and under various agreements with state and federal authorities, to quickly communicate with borrowers on matters such as requests for mortgage modifications or the initiation of foreclosure proceedings.
One example, Lawsky wrote: On June 19, 2014, it was discovered that Ocwen backdated by 41 days a letter denying a mortgage modification. The letter Ocwen sent to the borrowers was dated June 14, 2012. But Ocwen’s computer systems indicated it was actually sent on July 25, 2012
Read the New York regulator’s letter to Ocwen.

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