Friday, April 4, 2014

The Green Tree—Ocwen—Nationstar Mortgage Hustle

The Consumer Financial Protection Bureau reported in March 2014 that mortgage complaints are rising and cite loan transfers as a significant facet of the problem.

Loan servicers such as Green Tree, Ocwen, and Nationstar are subjecting borrowers to unwarranted processing fees, illegitimate foreclosures, payment denial, misplaced documents, harassment and threats.  Loans under modification are at heightened risk of corporate malfeasance.

Mortgage initiators such as Citi, Wells Fargo, Bank of America, Ally [formally GMAC], Countrywide, and JP Morgan Chase have sold servicing rights to Green Tree and other processors. In spite of the $25 billion National Mortgage Settlement in 2012, lending and servicing industries continue their predatory methods. For example Ocwen Loan Servicing agreed in February 2014 to compensate borrowers more than $2 billion for the company's abusive practices.

This CFPB-led action coupled with Ocwen consumer complaints and possible conflict of interest issues persuaded Benjamin M. Lawsky, New York's chief banking regulator to deny Wells Fargo's request to transfer $39 billion in servicing rights to Ocwen in February. Mr. Lawsky says that these surrogate agents are not protecting consumers' interests.

Approximate 2013 mortgage loan servicing portfolios for the big three are: Ocwen $455 billion, Green Tree [Walter Investment Management] $195 billion, and Nationstar $415 billion.

An example of Green Tree's business practices are revealed in the Gregory F. Grugnale class action lawsuit . For several years Mr. Grugnale received repetitive threatening calls regarding his unpaid mortgage but the plaintiff did not have a debt obligation with Green Tree. Other complaints regarding Green Tree's conduct can be found here and here . Green Tree, like Ocwen, has profited from forced-insurance schemes.

Nationstar consumer grievances are too similar to those of Ocwen and Green Tree to be happenstance. In fact they mimic the attorneys general findings in the 2012 National Mortgage Settlement. It appears that Ocwen, Green Tree, and Nationstar not only purchased servicing rights but also the banks' text book on how to defraud clients.

The evidence suggests collusion between the banks and the servicing principals. The question is will these intertwined entities be prosecuted?

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