By Yuka Hayashi
WASHINGTON — Regulators sued Ocwen Financial Corp., alleging the mortgage-servicing firm harmed thousands of customers by botching basic services.
The Consumer Financial Protection Bureau said the company specializing in subprime and delinquent loans had illegally foreclosed against at least 1,000 borrowers. The federal consumer watchdog alleged Ocwen also ignored customer complaints and failed to make disclosures about errors in borrowers’ records when selling off the servicing rights to their loans to other companies.
For years, Ocwen failed to properly implement a wide range of basic functions to service home loans, the CFPB said. The services Ocwen botched, according to the consumer watchdog, included sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Mortgage servicers handle payment collection, loan modification and foreclosures.
Ocwen said it “strongly disputes” the CFPB’s claims and vowed to “vigorously defend itself,” adding that “the substantive allegations in today’s suit are inaccurate and unfounded.” Ocwen /zigman2/quotes/209487504/composite OCN +2.85% shares tumbled on the New York Stock Exchange, closing at $2.49, down 54%.
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