Consumer complaint received 2025-04-16 00:00:00
Product: Mortgage — Other type of mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: Ocwen Financial Corporation
State: AL

Complaint narrative:
Consumer Financial Protection Bureau XXXX XXXX XXXX XXXX XXXX XXXX XXXX Dear Sir/Madam, I am writing to file a formal complaint against Red Star Mortgage Corp. and PHH Mortgage regarding predatory lending practices in a commercial loan transaction on XX/XX/year>. 

The details of my complaint are as follows : XXXX. Intentional Omission of Commercial Building Comparisons : Red Star Mortgage Corp. and PHH Mortgage intentionally omitted commercial building comparisons and instead inserted and used residential comparisons to devalue the commercial property in question. This practice significantly reduced and undervalued the property, resulting in unfavorable loan terms and conditions yielding significantly less equity. 

2. Lack of Settlement Statement : Red Star Mortgage Corp. and PHH Mortgage did not provide a settlement statement for review until the moment of closing. This lack of transparency prevented me from adequately reviewing the financial details and terms of the transaction, which is a violation of standard commercial real estate practices. 

3. Incomplete Appraisal : Red Star Mortgage Corp. and PHH Mortgage did not provide a full appraisal of the commercial property, although I was charged a {$3500.00} fee for the appraisal. Instead, they included a residential property in a market comparison, which further devalued the loan value. This practice is inconsistent with the appraisal requirements for commercial real estate transactions, which mandates a detailed and accurate valuation of the property based on its comparable commercial use.

4. Excessive Interest Rate and Junk Fees : The interest rate on the loan was set at 13.99 %, which is excessively high for a commercial loan and raises concerns about predatory lending practices. While this rate is not necessarily illegal, it was revealed at closing along with additional junk fees. These fees were significantly higher than typical commercial loan rates and may be considered unethical.

5. Racial Discrimination : We believe that a primary driver of these discriminatory practices was racially motivated. By devaluing the property, not being transparent about the terms, and intentionally shielding the settlement statements until the last moment, Red Star Mortgage Corp. and PHH Mortgage engaged in practices that disproportionately affect minority borrowers.

Red Star Mortgage Corp.

General Complaints : There have been various complaints alleging discriminatory lending practices by Red Star and PHH Mortgage Corp., including claims that minority borrowers were offered less favorable loan terms and higher interest rates compared to non-minority borrowers. 

PHH Mortgage XXXX. XXXX XXXX XXXX PHH Mortgage Corporation : This case involved allegations of discriminatory practices by PHH Mortgage Corporation. Although the specific claims were dismissed due to statutes of limitations, the case highlights concerns about PHH Mortgage 's lending practices. 

XXXXXXXX XXXX XXXX XXXX  XXXX PHH Mortgage Corporation : This lawsuit alleged that PHH Mortgage Corporation discriminated against borrowers based on race, color, religion, sex, familial status, or national origin in the terms, conditions, or privileges of sale or rental of a dwelling. 

Relevant Case Law : According to the Real Estate Settlement Procedures Act ( RESPA ), while it primarily applies to residential properties, commercial real estate transactions are expected to follow similar transparency standards. The requirement for a settlement statement in commercial real estate transactions is supported by industry practices and legal precedents, ensuring that all parties have a clear understanding of the financial terms before closing. 

Previous Complaints and Lawsuits : Red Star Mortgage Corp. has faced multiple lawsuits for predatory lending practices, including charging exorbitant interest rates and fees. PHH Mortgage Corp. agreed to pay over {$74.00} million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans that did not meet applicable requirements. Additionally, PHH Mortgage has been accused of engaging in consumer fraud and deceptive business practices, particularly in their handling of mortgage loans. There have also been complaints alleging racial discrimination in their lending practices. 

I request that the CFPB investigate these predatory lending practices and take appropriate action to ensure that Red Star Mortgage Corp. and PHH Mortgage adhere to fair and transparent lending practices in commercial real estate transactions.

Thank you for your attention to this matter. 

Sincerely, XXXX XXXX XXXX

Company response to consumer: Closed with explanation