What Is the Fraud Case Involving Ocwen?


Quick Answer

Ocwen Financial, one of the largest non-bank mortgage providers in the United States, has dealt with several fraud cases in its short and controversial history, with the most recent case involving a pair of fraud lawsuits that were thrown out by a Florida federal judge in September 2015. The plaintiffs alleged that Ocwen deliberately misled its shareholders by falsifying details in shareholder reports about the probe into the company by New York's Department of Financial Services.

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Full Answer

The joint class action lawsuit was thrown out of federal court because the judge ruled that the plaintiffs did not have grounds to sue Ocwen. Ocwen was able to successfully defend itself by claiming that, because shareholder losses stemmed solely from their purchases of stock in Altisource, an Ocwen subsidiary, the parent company was not responsible for stockholder deception or financial compensation.

Ocwen has been a frequent target of the Consumer Financial Protection Bureau since 2010 and has also run into trouble with financial regulators. The New York Department of Financial Services suspended Ocwen's mortgage servicing rights from Wells Fargo in February 2014 due to concerns over Ocwen's portfolio viability and adherence to federal regulations. This suspension triggered a massive 63 percent decline in Ocwen's common share price between February 2014 and December 2014.

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