Certificateholders Issue Notice Of Non-Performance Identifying Alleged Failures By Ocwen Financial Corporation As Servicer Or Master Servicer To Perform Covenants And Servicing Agreements In 119 Residential Mortgage Backed Securities Trusts

HOUSTON, Jan. 23, 2015 /PRNewswire/ -- Today, the Holders of 25% Voting Rights in 119 Residential Mortgage Backed Securities Trusts (RMBS) with an original balance of more than $82 billion issued a Notice of Non-Performance (Notice) to BNY Mellon, Citibank, Deutsche Bank, HSBC, US Bank, and Wells Fargo, as Trustees, Securities Administrators, and/or Master Servicers, regarding the material failures of Ocwen Financial Corporation (Ocwen) as Servicer and/or Master Servicer, to comply with its covenants and agreements under governing Pooling and Servicing Agreements (PSAs). 

Based on a lengthy investigation and analysis by independent, highly qualified experts, the Holders' Notice alleges Ocwen has failed to perform, in material respects, its contractual obligations as Servicer and/or Master Servicer under the applicable PSAs in the following ways:

• Use of Trust funds to "pay" Ocwen's required "borrower relief" obligations under a regulatory settlement, through implementation of modifications on Trust-owned mortgages that have shifted the costs of the settlement to the Trusts and enriched Ocwen unjustly;

• Employing conflicted servicing practices that enriched Ocwen's corporate affiliates, including Altisource and Home Loan Servicing Solutions, to the detriment of the Trusts, investors, and borrowers;

• Engaging in imprudent and wholly improper loan modification, advancing, and advance recovery practices;

• Failure to maintain adequate records,  communicate effectively with borrowers, or comply with applicable laws, including consumer protection and foreclosure laws; and,

• Failure to account for and remit accurately to the Trusts cash flows from, and amounts realized on, Trust-owned mortgages.

As a result of the imprudent and improper servicing practices alleged in the Notice, the Holders further allege that their experts' analyses demonstrate that Trusts serviced by Ocwen have performed materially worse than Trusts serviced by other servicers.  The Holders further allege that these claimed defaults and deficiencies in Ocwen's performance have materially affected the rights of the Holders and constitute an ongoing Event of Default under the applicable PSAs.  The Holders intend to take further action to recover these losses and protect the Trusts' assets and mortgages. 

The Notice was issued on behalf of Holders in the following Ocwen-serviced RMBS:

ABOUT GIBBS & BRUNS LLP
Gibbs & Bruns LLP is a premier boutique law firm engaging in high-stakes business and commercial litigation.  The firm is renowned for its signature lean trial teams and representation of both plaintiffs and defendants in complex matters, including significant securities and institutional investor litigation, director and officer liability, contract disputes, fraud and fiduciary claims, energy litigation, construction litigation, trust and estate litigation, antitrust litigation, legal and professional malpractice, and partnership disputes.  For more information, visit www.gibbsbruns.com.

SOURCE Gibbs & Bruns, LLP

Related Links

http://www.gibbsbruns.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED