Exclusive: Big mortgage investors take first step toward suing Ocwen

Fri Jan 23, 2015 5:15pm EST
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By Karen Freifeld

NEW YORK (Reuters) - Major mortgage bond investors including BlackRock, MetLife and Pimco on Friday took a first step toward suing Ocwen Financial Corp (OCN.N: Quote), accusing it of having failed to properly collect payments on $82 billion of home loans, according to documents seen by Reuters and a person familiar with the matter.

The group sent a formal notice of non-performance to Ocwen and trustees for 119 residential mortgage-backed securities trusts, alleging improper loan modification practices, wrongfully recouped advances, and a failure to account for cash flows.

The notice said that Ocwen also steered work to affiliates such as Altisource Portfolio Solutions (ASPS.O: Quote) and Home Loan Servicing Solutions HLSS.O for "unnecessary or overpriced servicing" to the detriment of the trusts, investors and borrowers.

The investors said the trusts had losses of more than $1 billion because of Ocwen's performance.

Margaret Popper, a spokeswoman for Ocwen, had no immediate comment.

(Reporting By Karen Freifeld)

A loan servicing agent is reflected in a small mirror on a computer terminal at Ocwen Financial Corporation in West Palm Beach September 10, 2009. REUTERS/Hans Deryk