Consumer complaint received 2016-05-04 00:00:00
Product: Mortgage — Conventional adjustable mortgage (ARM)
Issue: Loan modification,collection,foreclosure — 
Company: Ocwen Financial Corporation
State: VA

Complaint narrative:
On XXXX/XXXX/XXXX myself, and my mother, purchased a home as my primary residence.I had moved back to the U.S after living abroad and had no credit history, my mother was the only person on the note, the property is deeded to both of us.The loan, issuedby XXXX, was a XXXX Arm interest only at 6.375 % based on the 6 month libor plus 2.75 %, and due to adjust in XX/XX/XXXX.The 6 month libor in XXXX XXXX was 0.395 %. The new adjusted rate would have been 3.5 % .The loan amount was $ XXXX.In XXXX XXXX OCWEN, the new servicer of the loan, made contact with my mother offering a loan modification, neither of us had sought.The offer was to change the XXXX interest only loan to a 30 year fixed fully amortized mortgage with a new maturity date of XXXX/XXXX/XXXX and to reduce the principal balance by {$35000.00} to {$360000.00} and not to pay the XXXX payment.At no time during the conversation with the OCWEN rep was XXXX to us that there could be tax consequences. OCWEN did not require from my mother or myself any paperwork such as pay statements, or any other proof of loan eligibility.OCWEN required that both of us sign the loan modification agreement, have it notarized and sent back. Neither of us could understand why OCWEN was generous.The property was underwater when considering value and is today.We received the loan modification form for signature.The new agreement included both our names, remembering that my mother was the only original signatory and per paragraph XXXX on page XXXX. '' Borrower hearby renews and extends all indebtedness evidenced by the note, and jointly and severally promises to pay to the order of Lender the pricipal balance. " ... therefore making me also liable for the debt, whereas I was not before.The loan modification agreement was signed by us and notarized on XXXX/XXXX/XXXX and sent to OCWEN. The agreement was then signed by OCWEN on XXXX/XXXX/XXXX. However, on page XXXX, paragraph XXXX ( v ) ( b ) the agreement innocuously states. " such forgiveness may have tax consequences '' Considering, the property is my primary residence, I am now liable for the loan, I make the payments, I have been writing off the interest on my tax returns, the tax law of XXXX that debt forgiveness for primary residence being not a taxable event we disregarded the paragraph. In XXXX XXXX, my mother was audited by the Internal Revenue Service for the tax year XXXX and after completion of the audit, the only item brought up in the results of the audit was a XXXX issued by OCWEN for the forgiven debt and one month 's interest payment for XX/XX/XXXX.This was the first time that we knowledge had been a XXXX issued. As stated before, OCWEN did not disclose that a XXXX would be issued and or did either My mother or I receive a XXXX from OCWEN. " May have tax consequences '' is not the same as " will be issuing a XXXX ''. This is not stated in the loan modification agreement or disclosed to us verbally or in writing.Due to the fact that neither my mother or I had declared the XXXX on our tax returns, we believe the XXXX had triggered the audit. A copy of the XXXX was provided by the IRS to us as OCWEN was not able to provide one and was only made available after OCWEN was summoned by the IRS to provide a copy. The XXXX is only in my mother 's name. Considering the property is not her primary residence, this made the debt forgiveness a taxable event and a {$12000.00} bill followed. On XXXX XXXX, XXXX, my mother spoke to XXXX XXXX at Ocwen requesting the XXXX be issued in both names, so I could revise my XXXX tax returns and declare the debt forgiveness.An email response stating because my mother was the only person on the note issued on XXXX/XXXX/XXXX, the XXXX can only be issued in her name.On XXXX/XXXX/XXXX, we again requested that a XXXX be issued in both names because OCWEN had added me to the loan and made me liable for the loan agreement.To date OCWEN refuses to re-issue the XXXX.

Company response to consumer: Closed with explanation