General

Ocwen Servicing Abuses in Maryland and Elsewhere: Foreclosures Spark Lawsky Investigation and Lawsuits

Ocwen is a mortgage servicing company: it’s paid to collect payments from consumers in Maryland and elsewhere, deal with escrow accounts, and sort out any problems that arise. Servicers do not necessarily own the mortgage itself, only the “servicing rights”. The CFPB’s guidance for examining mortgage servicers explains “[t]his is because some entities have expertise in payment processing and other servicing responsibilities, while others seek to invest in the underlying mortgages.” Mortgage servicers are supposed to help the mortgage repayment process run smoothly and to deal with problems – such as mistakes in escrow or missed payments. According to Ocwen’s slogan “Helping homeowners is what we do!”

Homeowners Sue

However, lawsuits filed in Maryland and around the country accuse Ocwen of everything from blatant fraud to utter incompetence, all to the detriment of the homeowners it claims to be helping.  A lawsuit filed in Florida recently accuses Ocwen of needlessly forcing homeowners into foreclosure by turning minor problems into major ones. NPR reports the story of one couple who were charged massive fees after an error regarding property taxes:

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Debt Disparity: Credit Card Debt in Maryland

Policy makers in Maryland and elsewhere should read “The Debt Disparity: What Drives Credit Card Debt in America”, released in the Fall of 2014 by the think tank Demos (www.demos.org).  Demos conducted a survey of nearly 2000 consumers to discover how consumers with outstanding credit card debt differ from those with no credit card debt. The study found that those with credit card debt are more likely to have no college degree, no health insurance, to have experienced recent unemployment and to be underwater on their mortgages. They are also more likely to have children.

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Why and How Arbitration Constitutes the “Strip Mining of Legal Rights”

When it comes to consumer or employment contracts, forced arbitration is a problem in Maryland, and throughout the country.

In their April, 2014 article titled “The Strip Mining of Legal Rights” Ralph Nader and Theresa Amato call for limits on the use of fine-print terms to undermine legal rights. They call the use of fine print to avoid liability an “expanding coup d’etat against the civil justice system” and suggest action by Congress and federal agencies to control the use of forced arbitration clauses and establish model contract terms which are fair to both consumers and businesses.

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How Forced Arbitration in Boilerplate Contracts Strips Away Consumer Rights

Fine print boilerplate is everywhere, but what can be done to stop it? Theresa Amato writes in The Nation that the Consumer Financial Protection Bureau should take four steps to promote fairness in consumer contracts:

  1. Prohibit forced arbitration clauses in consumer contracts
  2. Maintain a searchable database of all standard form contracts used by the industries it regulates
  3. Develop its own “consumer-road-tested contracts” and prohibit certain terms, such as those that prohibit public criticism of the business involved, or waive liability for negligence.
  4. Promote a “fair contract” symbol to make it easy to identify contracts which conform to the standards proposed.

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