It was only a single sheet of paper, but troubled mortgage servicer Ocwen couldn’t even get that right.
Last March, Brooklyn resident Douglas Gibbs sold his home, paid off his mortgage and contacted Ocwen for a Satisfaction of Mortgage statement so he could transfer the property’s title to the new owner.
Ocwen did not respond.
With the sale in jeopardy, Gibbs hired a lawyer to call Ocwen. He then received a document that is not valid in New York — even though Ocwen is chartered here.
“They did not know what goes on in New York,” said lawyer Hal Ginsburg of Ginsburg & Misk.
Gibbs had to put $50,000 in an escrow account before being able to sell the home.
Gibbs is just one of many homeowners who have allegedly been abused by Ocwen. The problems are so severe that they’ve attracted the attention of New York’s top financial regulator, Benjamin Lawsky.
On Thursday, he put the kibosh on Ocwen’s bid for $39 billion in servicing rights from Wells Fargo, which would have brought its portfolio to nearly $500 billion.
Lawsky apparently halted that deal amid concerns Ocwen could not handle another acquisition.
But Ocwen’s servicing practices were subject to Department of Financial Services orders in 2011 and 2012. The 2012 order says that when DFS assessed compliance with the 2011 servicing standards agreement, evidence suggested Ocwen wasn’t living up to the deal.
Problems ranged from failing to properly notify borrowers of a foreclosure action, to foreclosing without evidence of Ocwen’s right to do so, to foreclosing on borrowers trying to modify their loans.
DFS was concerned that “Ocwen’s practices have … deprived certain struggling homeowners in New York of many opportunities, including to cure the delinquencies on their loans before a foreclosure,” the order said.
Gibbs had to haul Ocwen into court. Ocwen didn’t show up for a hearing last week, leaving the court to order the mortgage discharged.
Ocwen said it will continue to work with DFS to resolve problems.