Update 2-6-2015: Major mortgage bond investors and the state of Confusion (i.e., California) are taking legal action over Ocwen’s management mismanagement of mortgage servicing. They alleged improper loan modification practices, wrongfully recouped advances, and a failure to account for cash flows. Other non lender servicers are taking flak as well.
More and more banks are tying to shed the effort to service mortgages. So mortgages are being serviced by non mortgage companies like Ocwen Financial, Nationstar Mortgage Holding, and others.
Hoever, these non-bank mortgage servicers are somehow exempt from capital requirements by CFPB rules – oh really? Yes – according to the Financial Stability Oversight Council.
Some of the problem these non-bank servicers are accused of is improper or slow application of mortgage payments to customer accounts or charging unauthorized fees.
Source: WSJ, 3-10-2014,C1.