Regulators sue Ocwen Financial over mortgages

New York • State and federal authorities have sued mortgage servicer Ocwen Financial Corp., saying the company botched the handling of millions of mortgage accounts.

The Consumer Financial Protection Bureau said Thursday the accounts Florida-based Ocwen serviced were riddled with errors throughout the repayment process.

It said the company would go after borrowers long before verifying whether the debt was valid, allegedly illegally foreclosed on homeowners, and charged borrowers for add-on products without their consent. Those are just a few of the violations the CFPB alleged in its complaint.

A representative for Ocwen did not immediately respond for a request for comment. The company is one of the nation's largest non-bank mortgage servicers, focusing mostly on subprime and delinquent mortgages, handling 1.4 million mortgages in all 50 states as well as Washington, D.C. worth roughly $209 billion.

The CFPB, the state of Florida, and other state agencies are suing Ocwen or are issuing cease-and-desist orders against the company in a joint action on Thursday.

"Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes," CFPB Director Richard Cordray said in a statement.

Regulators said when consumers complained to Ocwen, the company routinely failed to acknowledge or investigate the consumers' complaints.

This is not the first time Ocwen has been in regulatory trouble. The CFPB went after Ocwen in 2013, again alleging that the company had failed to services its loans illegally. The company had to, at the time, refund $125 million to roughly 185,000 borrowers and provide $2 billion in principal reduction to homeowners who were underwater in their mortgages.

The news sent shares of Ocwen falling by more than 50 percent in afternoon trading.