Ocwen is NOT Entitled to Invoke the Benefits of a Legal Presumption

The banks are winning  most cases because homeowners choose not to defend. The second most reason for this fraudulent winning streak is the application of legal presumptions that eliminate the need to actually prove their case. 99% of the time they are winning cases in which they should lose and be subject to sanctions for trying to defraud the court and the homeowner.

The bottom line is that if ever there was a source of information that was less than credible in civil litigation it is the case of Ocwen as a servicer. By definition that means that they are not entitled to any legal presumptions. And that means Ocwen must prove everything proffered to prove the truth of any matter asserted.

All statutes on evidence say the same thing: if the hearsay contained within testimony or a document comes from an unreliable source,  no legal presumptions should apply.  So a facially valid document is not presumptively correct as to its contents. And a payment history is not presumptively correct merely because it supposedly came from the records of the servicer.

In plain language, no document from Ocwen should be allowed in evidence without the testimony of a person who either prepared it or who witnessed its preparation and no entry of transactions should be allowed in evidence without the proper foundation by a witness with personal knowledge.

“Familiarity” with the books and records of Ocwen is NOT knowledge of the books and records of the foreclosing party in all events. THAT is where the 3d DCA in Florida and most other courts are getting it wrong. There is no foundation ever laid for showing that the books and records of the servicer are the complete books and records of the named foreclosing party (frequently a trust). What we are seeing is, in reality, fabrications of a slice of a slice of third party records.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Practice Hint: Ask for the party to whom payments are made on the subject loan account. Ask whether those payments s stopped. In most cases the payments have not stopped even though the borrower has not paid anything. That is because of “servicer advances” where the debt is once again illegally shifted to the benefit of the underwriting bank that is also the Master Servicer. The named foreclosing party is used as a proxy for the Master Servicer to recover “servicer advances.” This is yet another reason why the named foreclosing party is not the real party in interest or, alternatively, the named foreclosing party is only one of many entities who have an exclusive interest in the proceeds of the foreclosure.

Note this paragraph in the Massachusetts consent order:

WHEREFORE, Ocwen, at all relevant times herein was a wholly-owned subsidiary of Ocwen Mortgage Servicing, Inc., which was a wholly-owned subsidiary of Ocwen Financial Corporation, has engaged in the business of servicing residential mortgage loans in Massachusetts. These activities generally include collecting or remitting for any lender, noteowner, noteholder, or itself, payments, interest, principal, and trust items on a residential mortgage loan in accordance with the terms of the residential mortgage loan, as well as the additional servicing activities further described below. Ocwen has also engaged in the business of residential mortgage lending.

The MMC Examination found that the effectiveness of Ocwen’s Management Control Systems (MCSs) failed to keep pace with growth leading to a material increase in operational deficiencies including the failure to timely date borrower correspondence, the failure to timely pay borrower escrow items, the failure to ensure the accuracy of escrow statements, the failure to timely reconcile consumer custodial accounts and the failure to ensure licensure of an affiliate that provides servicing related activities. The MMC Examination review of these operational deficiencies revealed that as Ocwen attempted to assimilate MSR purchases, deficient MCSs caused consumer harm, led to violations of federal and state regulations and resulted in non-compliance with servicing standards required by the 2012 National Mortgage Settlement (NMS). (e.s.)

… the number of Ocwen’s comment codes has ballooned to more than 8,400 such codes. Often, due to insufficient integration following acquisitions of other servicers, there are duplicate codes that perform the same function. The result is an unnecessarily complex system of comment codes, including, for example, 50 different codes for the single function of assigning a struggling borrower a designated customer care representative.” (e.s.)

The MMC Examination found that Ocwen has engaged in a pattern and practice of unsafe and unsound loan servicing by manipulating the lender-placed force-placed insurance market and artificially inflating the premiums and then passing the improperly inflated amounts onto consumers.

If they refuse to give information on remittances to an alleged creditor, how can they claim to be a servicer? What are they hiding?

Who are the “affiliates” that provide service related cities? What are those “service related activities?”

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Hat tip to Dan Edstrom:

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