Consumer complaint received 2019-01-29
Company: Ocwen Financial Corporation
State: RI
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Incorrect information on your report
Sub-issue: Account status incorrect

Complaint:
In XX/XX/2013, pursuant to VT statute 12 V.S.A. 4631, which ... assure ( s ) the availability of mediation and application of government loss mitigation program requirements in actions of foreclosure, we entered a mediation with XXXX  XXXX XXXX to avoid foreclosure. In the end, the mediator determined that we were eligible for the Federal HAMP program.

At the time, we had a 1st and a 2nd lien with Ocwen. The 1st is the loan that was modified.

Had we proceeded with HAMP, we would have addressed the 2nd lien with the adjacent 2MP program, but at that point Ocwen countered with an offer of an in-house Shared Appreciation Modification ( SAM ).

We were offered a Deferred Principal Balance reduction of {$86000.00} in equal installments over 3 years provided that we did not have consecutive late payments, which we achieved.

When we asked about the 2nd lien, we were told that it would go away since we were upside down on the 1st alone. Adding the 2nd back to the equation would have put us back underwater.

After we agreed to the modification, we looked on line, and saw that the balance on second showed XXXX  with no payments due ( screenshot attached. The XXXX balance 2nd is above the modified 1st lien balance, taken in XX/XX/2013 ).

Now, 6 years later, in the course of appllying for an FHA loan to refi our house, we found that one of my credit reports showed an odd {$7700.00} past due amount on that 2nd XXXX out loan, with a balance of {$50000.00}. The lender advised me contact Ocwen and get that removed.

Instead of removing it, Ocwen informed me that the 2nd lien has been referred to a collection agency and updated their credit reporting on the loan, which knocked 100 points off my credit score and made me ineligible for the FHA loan. Now, we are getting almost daily harassing phone calls from their collection agency.

In effect, Ocwen is holding my access to credit hostage in an attempt to extort payment for a loan that they said they wrote off in our modification process and using their collection agency to exert pressure. Ocwen said nothing to us about this loan for 6 years, and now, after we met the terms of our modification agreement, they are attempting to claw back the Deferred Principal we negotiated because now they know we are trying to access credit. Given Ocwens history of abusive behavior, it would not surprise me at all to learn that this is a deliberate strategy and a pattern of behavior. 

Had Ocwen disclosed that it planned to retain the 2nd lien, we obviously would have taken advantage of the Federal HAMP/2MP program and none of this would be an issue today. This is particularly egregious considering that we agreed to Shared Appreciation as part of the SAM agreement on the 1st lien.

If we sold the property for {$300000.00} today ( a realistic FMV for our property ), according to the terms of the modification on the 1st lien we would net ~ {$54000.00} after satisfying the Shared Appreciation terms of the SAM, which would include an {$18000.00} payment to Ocwen ( 25 % of the appreciation ). If the 2nd lien were enforceable, after paying the ~ {$50000.00} we would be left with ~ {$4000.00} which would be more than wiped out by closing costs. 

We did not agree to a SAM with Ocwen over HAMP/2MP in XX/XX/2013 so that we could find ourselves underwater again and so that they could hold our credit hostage after 6 years of meeting our obligations under our agreement. 

Given the $ XXXX settlement Ocwen reached with the CFPB, I doubt that this behavior comes as a surprise. Apparently, even that massive fine was not sufficient to prompt them to change their behavior.

Company response to consumer: Closed with explanation