From David Dayen:
The year just wouldn’t be complete without one final dubious financial fraud settlement. A consent order between the Consumer Financial Protection Bureau, every state but Oklahoma, and the mortgage servicing company Ocwen again shows the continued, systemic mistreatment of American homeowners. Ocwen stands accused of “violating consumer financial laws at every stage of the mortgage servicing process,” according to CFPB Director Richard Cordray. But under this settlement, their executives will face no criminal charges, the firm will not actually pay the large majority of the penalties themselves, and they did not even have to admit wrongdoing in the case. Merry Christmas.
Ocwen built their servicing empire in part by purchasing the rights to handle mortgage accounts from big banks like JPMorgan Chase, Bank of America and Ally Bank, the same ones that settled their own cases of mortgage servicing abuse in the $25 billion National Mortgage Settlement in February 2012. So to recap, big bank servicers abused homeowners, paid a nominal fine, and sold their servicing operations to non-bank servicers like Ocwen, who routinely engaged in identical practices. This game of Whack-a-Mole, with customer accounts passed around from one rogue business to another like a hot potato, shows that the problem lies with the design of the mortgage servicing industry itself, not the individual companies.