Feds sue mortgage company over alleged illegal foreclosures

A consumer watchdog is cracking down on a mortgage servicing company that it claims illegally foreclosed on homeowners.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit Thursday against Ocwen Financial Corporation.

“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. 

“Borrowers have no say over who services their mortgage, so the bureau will remain vigilant to ensure they get fair treatment.”

{mosads}The Florida-based Ocwen, which has serviced nearly 1.4 million mortgages on behalf of banks, has not been convicted of any of these alleged violations.

But Ocwen has received complaints from more than 300,000 borrowers in the last two years, according to the CFPB.

One of the biggest complaints is about how Ocwen handles the foreclosure process.

The CFPB alleges Ocwen has “wrongfully initiated foreclosure proceedings on at least 1,000 people.”

Other times, Ocwen “failed to appropriately credit payments made by numerous borrowers,” the agency claims.

The CFPB did not say how much money it’s seeking to compensate the borrowers it says were mistreated.