January 23, 2015 / 10:19 PM / in 3 years

Exclusive: Big mortgage investors take first step toward suing Ocwen

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, 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.

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

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 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

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