April 20, 2017, 11:53 AM CDT
U.S. and state officials sued Ocwen Financial Corp., a processor of consumer mortgage payments, for allegedly making widespread errors and illegally foreclosing. North Carolina’s bank regulator said fixing some of the company’s problems could put it out of business.
The U.S. Consumer Financial Protection Bureau said Ocwen botched basic functions like sending accurate monthly statements, crediting payments and handling taxes and insurance from escrow accounts. Florida’s Attorney General filed a similar suit. A group of state mortgage regulators blocked the company, which according to the CFPB collected payments on almost 1.4 million loans as of the end December, from acquiring new business. Ocwen’s shares fell the most on record.
“As regulators, we encourage and advise companies to remain compliant with state and federal laws. However, Ocwen has consistently failed to correct deficient business practices that cause harm to borrowers,” Ray Grace, North Carolina’s Commissioner of Banks, said in a press release on Thursday. “We cannot allow this to continue.