Ocwen Says RMBS Investors Seek Less Borrower Relief

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3 · 23 · 15

In a letter to trustees on residential mortgage-backed securities, Ocwen Financial Corp. claims that allegations of its non-performance are an attempt by investors to thwart efforts to assist distressed borrowers.

A letter was sent on Jan. 23 by Gibbs & Bruns LLP on behalf of a group of RMBS investors alleging non-performance, according to the Atlanta-based servicer.

The investors include BlackRock Financial Management Inc., Pacific Investment Management Co. and Metropolitan Life Insurance Co. Also represented were Kore Advisors LP and Neuberger Berman Europe Limited.

But, in a rebuttal letter to
trustees and master servicers for 119 RMBS trusts, Ocwen claims that the notice from the investors is just part of a long-running campaign to impose changes to standard servicing practices.

The investors reportedly attempted to block Ocwen from acquiring a servicing portfolio in 2013 — though that attempt was ultimately unsuccessful.

According to Ocwen, the investors are attempting to force more foreclosures and cut back on the number of loan modifications completed through the Home Affordable Modification Program.

“HAMP furthers the Treasury Department’s strong public policy to help struggling borrowers remain in their homes by encouraging and guiding servicers like Ocwen to pursue profitable loan modifications rather than rushing to foreclosure,” Ocwen said. “Instead, these investors’ pro foreclosure, anti modification agenda is driven by their desire to increase their own financial returns on their specific tranche-level holdings in RMBS trusts, at the expense of long-term gains to the trusts as whole, through sustainable modifications.”

According to Ocwen, each modification it performs is designed to yield a higher anticipated recovery for investors than foreclosure, and none of the investor allegations establishes that it breached the standards in the agreements.

Ocwen said that it is compliant with the current standard of servicing outlined in its agreements — which requires it to service loans in the best interest of all investors.

“Unable to establish otherwise, the investors instead malign Ocwen’s modifications through selectively presented data that does not comport with the facts, as well as allegations of imprudent modification practices that are belied by Ocwen’s use of standard industry practices and compliance with applicable regulations,” a written statement said.


Mortgage Daily Staff


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