Consumer complaint received 2018-01-25 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Ocwen Financial Corporation
State: PA

Complaint narrative:
XX/XX/XXXX RE : Ocwen Loan Servicing, LLC Account Number : XXXX Property Address : XXXX XXXX XXXX XXXX XXXX PA XXXX Ocwen Loan Servicing, LLC ( Ocwen ), has systematically failed to comply with Consumer Financial Protection Bureau Regulation X, 12 C.F.R. Part 1024, and has therefore failed to help our homeowner client, XXXX XXXX XXXX, avoid an unnecessary foreclosure of her home through a seriously flawed Short Sale process. As a result, our clients home remains scheduled for an unnecessary Sheriffs Sale on XX/XX/XXXX, while XXXX XXXX XXXX and her prospective buyer were prevented from closing on an approved short sale of XXXX XXXX XXXX home that could have occurred prior to the scheduled sale date. 

Our client, XXXX XXXX XXXX, applied for approval of a short sale of her home on XX/XX/XXXX. Upon receipt of the application, Ocwen arranged with XXXX XXXX XXXX to have an appraisal of her home performed. In the letter dated XX/XX/XXXX,, XXXX XXXX XXXX received a conditional approval for the Short Sale after Ocwens appraiser, XXXX XXXX, conducted an evaluation of the property determined its market value to be {$640000.00} ( copy of conditional approval enclosed ). XXXX XXXX XXXX engaged a realtor, XXXX XXXX, XXXX XXXX XXXX, XXXX, Pennsylvania, to list the property for sale. On XX/XX/XXXX, we contacted Ocwen and spoke to XXXX, agent ID No. XXXX, who advised us that Ocwens policy required the property to be listed at 120 % of the appraised value {$870000.00}. Despite XXXX XXXX concern that such a listing price would discourage prospective buyers from considering the property, XXXX XXXX listed the property for sale at {$870000.00} as required by Ocwen. 

The only solid offer received was one from XXXX and XXXX XXXX on XX/XX/XXXX, in the amount of {$550000.00}. We immediately submitted the offer to Ocwen for approval. Ocwen waited until five months after it received that initial Short Sale offer to reject it. Before deciding whether to accept the offer, Ocwen insisted on re-appraising our clients home. Ultimately, the reason for the rejection was that the offer was substantially lower than Ocwens XX/XX/XXXX,  updated appraisal value of {$750000.00}. 

By XX/XX/XXXX, the Ocwen Ombudsmans Office had become involved in the application process because we directed our concerns to the escalation department. A discussion with the Ombudsmans office clarified that Ocwen would reject any offers thats substantially lower than its XX/XX/XXXX, updated appraisal value of {$750000.00}. Although Ocwen refused to provide a firm sale price that it would accept, Ocwen encouraged us to request the buyer to increase the offer to a figure closer to Ocwens updated appraisal value. The buyer declined to increase his offer to a number closer to the new appraised value due to the amount of improvements and upgrades needed on the home.. Ocwens Ombudmans Office sent an email to our office on XX/XX/XXXX, indicating that the buyers offer of {$500000.00} ( Ocwen understated the amount of the offer by {$50000.00} ) would likely be rejected, citing the reason for the rejection that the offer was too low. Having received that decision, XXXX XXXX XXXX notified XXXX XXXX, who in turn notified the buyer and arranged for a return of his deposit and release from the purchase and sale agreement. XXXX XXXX XXXX again placed her home on the market. 

Well after the buyer was released and his deposit had been returned, Ocwen sent the XXXX XXXX XXXX a Discounted Payoff Offer that approved the buyers offer, providing Ocwen would net {$490000.00} ( copy of XX/XX/XXXX enclosed ). A preliminary closing analysis indicated that the {$550000.00} offer would have netted Ocwen at least {$490000.00}. Having lost the original buyer who had waited for more than half a year for Ocwen approval and who had only given up when his {$550000.00} offer was rejected, XXXX XXXX XXXX and her new real estate broker sought out another offer that would meet the terms of Ocwens XX/XX/XXXX offer. On XX/XX/XXXX, XXXX XXXX XXXX received a cash offer for the property from a new buyer and substituted the new agreement of sale with a sale price of {$550000.00}, equivalent to the first offer but which would have netted Ocwen $ XXXX more than the first deal due to the elimination of a realtor commission. Our office forwarded closing documents to Ocwens foreclosure counsel on XX/XX/XXXX, the expiration date of the Discounted Pay Off Offer and forty-one days prior to the scheduled sheriff sale date requesting a two week extension to finalize negotiations with a second lien holder of a substantial debt that was disclosed to us by the title agency. 

Foreclosure counsel suggested we also contact Ocwens Ombudsman Office to request the short extension. Therefore, the proposed closing package was submitted to XXXX XXXX, Account Analyst, Consumer Ombudsman for Ocwen thirty-six days prior to the scheduled sheriff sale date. A follow up call was made to XXXX XXXX by Attorney XXXX XXXX on XX/XX/XXXX, during which XXXX XXXX indicated that our clients documents were up to date and no new short sale application was required. One day later we received a Notice of NON-APPROVAL FOR SHORT SALE from Ocwen Loan Servicing department. The notice informed us that he discount payoff agreement expired and invited our client to submit a new sort sale package and a new offer for review. On XX/XX/XXXX, we received another Notice of Non-Approval For Short Sale, this time stating upon review of the information submitted it was too close to the confirmed foreclosure sale. Ocwen is in violation of CFPB regulations which do not prevent the lender from evaluating a borrower for mortgage assistance because the foreclosure sale date is less than 30 days way. 

The homeowner has made multiple attempts to receive an affordable modification to no avail. Since, XX/XX/XXXX, our frustrated homeowner has tried to end this cycle by pursuing a short sale with Ocwen. We have invested significant time and resources to cleared each hurdle placed in our path large due to the fact that Ocwens staff does possess the competence, expertise or business knowledge to complete a short sale transaction. 

Ocwens short sale process is riddled with dysfunction and should be federally and locally investigated. 

The homeowner has reasonably relied on Ocwen to have staff that are trained and equipped with the knowledge to execute a short sale transaction as an alternative to foreclosure. Ocwen should postpone the impending foreclosure sale scheduled for XX/XX/XXXX and permit the sale to go to closing.

Company response to consumer: Closed with explanation