Consumer complaint received 2025-12-31 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — Foreclosure
Company: Ocwen Financial Corporation
State: FL

Complaint narrative:
The mortgage loan on the subject property was paid in full and formally cancelled, as reflected in the recorded Notice of XXXX Mortgage XXXX, dated XX/XX/XXXX. 



Despite the recorded cancellation of the mortgage, the servicer and/or its agents continued to treat the loan as active and pursued foreclosure-related actions after payoff. 



This complaint is based on documentary, public-record evidence, not a dispute over missed payments or delinquency. The contradiction is facial : a mortgage that was satisfied and cancelled was nevertheless enforced as though it remained outstanding. 



I previously attempted to resolve this matter directly and requested clarification and records explaining how foreclosure activity could occur on a cancelled mortgage. In response, PHH Mortgage Services issued a written response dated XX/XX/XXXX, stating in relevant part ( verbatim ) : If your request relates to funds from an insurance claim, we regret to inform you that such funds are not available to you, as the property has been foreclosed. In line with investor guidelines, any claim funds held in restricted escrow would have been remitted directly to the investor. 



PHH further stated ( verbatim ) : If you believe you have a legal entitlement to these funds, you may wish to pursue the matter through the appropriate legal channels and provide proof of entitlement in court. 



PHH additionally stated ( verbatim ) : After a thorough review, we have determined that no error occurred in this matter. 



PHH did not address, reconcile, or explain how foreclosure could lawfully occur after a mortgage was paid in full and formally cancelled of record on XX/XX/XXXX. 



I am requesting CFPB review of the servicers payoff accounting, servicing records, foreclosure authority, internal controls, and reliance on investor guidelines, given the existence of a recorded mortgage cancellation prior to foreclosure activity. 



I asked for a neutral CPA to get the full amount but from my forensic auditing the servicer owes the following amounts due to mortgage servicing violations under RESPA ( 12 U.S.C. 2605 ), TILA ( 15 U.S.C. 1640 ), FDCPA ( 15 U.S.C. 1692 ), and unfair practices ( CFPA, 12 U.S.C. 5536 ) : Unapplied XXXX  Deferred Forgiveness ( Violation : Failure to apply required principal reduction under XXXX guidelines and RESPA proper crediting requirements ) The XXXX modification qualified for {$220000.00} in principal forgiveness that was never applied, leaving the principal frozen on statements. 

Amount owed : {$220000.00} Unapplied Insurance Proceeds ( Violation : Failure to promptly credit insurance payments to the loan balance under XXXX XXXXXXXX ( k ) ( XXXX ) ( C ) and proper escrow accounting ) The servicer cashed insurance checks totaling {$280000.00} on XX/XX/XXXX and XX/XX/XXXX, but never credited the funds to the loan balance ( principal remained frozen at {$230000.00} on the XXXX forms ). 

XXXX owed : {$280000.00} Interest Overcharges ( Violation : Charging excessive and unauthorized interest after satisfaction, including unfair and deceptive practices under XXXX ) The servicer reported and charged {$250000.00} in interest over XXXX years on the frozen {$230000.00} principal balance, resulting in an effective interest rate of 40.8 %. 

Amount owed : {$250000.00} Unjust Enrichment Foreclosure Sale Payoff ( Violation : Continuing foreclosure and collecting payoff after loan satisfaction, in violation of RESPA servicing standards ) The servicer collected {$350000.00} from the foreclosure sale on a loan that had already been satisfied by insurance proceeds. 

Amount owed : {$350000.00} Post-Cancellation Overpayment ( Violation : Continued escrow advances and charges after loan satisfaction and note cancellation, in violation of RESPA XXXX and escrow accounting rules ) After the note was cancelled on XX/XX/XXXX, the servicer continued charging advances, taxes, and fees. 

XXXX owed : {$120000.00} Seized Advances from Surplus ( Violation : Improper claim on surplus funds for post-satisfaction charges, in violation of servicing duties ) The servicer took {$24000.00} from the foreclosure surplus funds for alleged post-cancellation charges. 

Amount owed : {$24000.00} Subtotal ( Base Amount ) : {>= $1,000,000} Prejudgment Interest ( using actual Florida quarterly rates on the base amount from the wrongful dates ) : {$300000.00} Total Amount Owed by the Servicer for Mortgage Servicing Violations : {>= $1,000,000}

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation