Ocwen Hit With Biggest Judgment Ever

That verdict is the largest loss so far for the servicer of about 350,000 home loans. However, Ocwen has vowed to fight the decision.

The plaintiff’s attorney, Robert Hilliard, didn’t mince words when asked about the West Palm Beach-based company. “They steal houses with equity,” he said.

The lawsuit revolved around a retired widow who lives in the house her father built in 1943.

When Sealy Davis, a former nurses’ aid with a children’s hospital, needed a new roof and porch, she decided to finance the improvements with a home-equity loan. When she missed a payment because of illness, she asked her mortgage company for a lower payment plan. Hilliard said that although a company representative agreed, Davis did not receive the lower payment plan. Still batting her illness and without the lower payments, Davis fell further behind on the home equity loan.

When Ocwen started foreclosure proceedings, Davis complained to the Texas Attorney General’s office, declared bankruptcy to stave off the foreclosure and retained Hilliard to represent her. Once again, Hilliard had strong words about Ocwen. He said that Ocwen “lied” to the attorney general’s office.

“There is another word for what they put in that letter,” he said about the company’s response to Davis’ complaint. Hilliard said he provided the jurors in Davis’ case with copies of Ocwen’s letter to the attorney general’s office.

Hilliard said that when, in spite of her actions, a notice of foreclosure was tacked upon Davis’ door, the Texas widow, fearing she would lose the house, crawled under the bed thinking that she would be dragged out of her home. “So that was my argument, that she was driven to her hands and knees,” he said.

Not surprisingly, Ocwen sees the situation differently.

Paul Koches, Ocwen’s general counsel, explained that Davis’ default and decision to declare bankruptcy was not its doing and that it attempted to resolve the matter but that it became “an exercise in futility.”

“When even our offer to plaintiff’s lawyer to cancel the borrower’s debt and permit her to keep the property was refused, it was clear that they were bent on a litigation strategy to play the jury sympathy card against a deep pocket defendant,” he said. Ocwen reportedly offered to settle the case by giving Davis $20,000 and title to her home.

Koches declared that the company will “vigorously” fight the verdict.

Hilliard also recently represented another Ocwen customer who was awarded a $3 million verdict against the company.

In 2004, the National Community Reinvestment Coalition announced it was filing a class action lawsuit against an Ocwen subsidiary for alleged abusive servicing and foreclosure practices. At the time, an NCRC executive said that over the prior two years they received over 150 complaints from consumers who say they have experienced problematic servicing practices with Ocwen Federal Bank FSB.

Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record.

e-mail Lisa at: [email protected]