Ocwen Asks Federal Court for Expedited Decision That the CFPB Is Unconstitutional and Seeks Participation of the Department o...
April 26 2017 - 6:30AM
Ocwen Financial Corporation, (NYSE:OCN) (Ocwen or the Company),
today announced the filing of two related motions that seek an
early court ruling that the Consumer Financial Protection Bureau
(CFPB) is unconstitutional, and so its enforcement action against
Ocwen should be thrown out.
As discussed in yesterday’s legal filings, Ocwen believes that
the CFPB is unconstitutionally structured because it vests too much
unfettered power in the hands of the CFPB’s Director and the Bureau
itself, without any meaningful oversight by the President or
Congress. A panel of three judges on the D.C. Circuit Court of
Appeals recently found that the CFPB is unconstitutionally
structured—a decision which is now being reviewed by the entire
D.C. Circuit Court of Appeals. In that case, the Department of
Justice recently filed a brief that stated its agreement with the
panel decision, that the CFPB is unconstitutional for this
reason.
In yesterday’s filings, Ocwen informed the Court and the DOJ
that Ocwen intends to directly challenge the CFPB’s
constitutionality at the earliest possible opportunity and to seek
dismissal of the case on this ground and others. Ocwen’s filings
ask the Court for a case management conference to discuss how the
parties can get to that issue first, before any other proceedings
in the case. Ocwen has also filed a separate motion specifically
asking the Court to invite the Department of Justice to participate
in the case so the Court can consider fully the Attorney General’s
conclusion that the CFPB is unconstitutionally
structured.
Ocwen seeks to get this issue resolved early, because it should
be relieved of having to defend this unfair action from an
unconstitutional agency. The filings inform the Court how
this lawsuit reflects what happens when there is an unaccountable
agency like the CFPB. For example, the Complaint is riddled with
allegations about conduct that Ocwen already addressed—sometimes
years ago—with refunds, credits, or other consumer
remedies. Moreover, the CFPB contends that on “numerous”
occasions or “at least one thousand” times Ocwen has wrongfully
started or completed foreclosures on consumers who were in the
midst of applying for or performing a loan modification. But so far
as Ocwen is aware—and the Complaint does not identify the loans—the
CFPB did not actually look at the individual servicing files for
these consumers’ loans before making this allegation.
Over the course of two years, Ocwen has been in regular
communications with the CFPB. Despite Ocwen’s cooperation and
repeated offers to provide specific loan files for the CFPB’s
review, the CFPB has proceeded by filing a lawsuit without factual
or legal merit, apparently in an effort to bolster its own
political agenda. Although Ocwen believes the lawsuit should be
dismissed on constitutional grounds, it also is prepared to
vigorously contest the inaccurate CFPB allegations.
Finally, the CFPB’s conclusory claims of borrower harm are
incompatible with the well-documented positive results from Ocwen’s
borrower-assistance efforts. Ocwen’s ability to help homeowners at
risk of foreclosure remain in their homes through responsible loan
modifications continues to positively impact communities across the
country. Since January 1, 2008, Ocwen has granted over 735,000 loan
modifications, including approximately 75,000 in 2016, and Ocwen is
responsible for 20% of all modifications under the U.S. Department
of the Treasury Home Affordable Modification Program, the federal
government’s leading modification program. Ocwen also has provided
billions of dollars in principal forgiveness to homeowners at risk
of foreclosure. In addition, Ocwen has worked closely with its
Community Advisory Council, a diverse group of national, regional,
and local non-profit housing counseling, community development, and
civil rights organizations, to maximize Ocwen's positive impact in
communities across the country.
About Ocwen Financial Corporation
Ocwen Financial Corporation is a financial services holding
company which, through its subsidiaries, originates and services
loans. We are headquartered in West Palm Beach, Florida, with
offices throughout the United States and in the U.S. Virgin Islands
and operations in India and the Philippines. We have been serving
our customers since 1988. We may post information that is important
to investors on our website (www.Ocwen.com).
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements may be identified by a
reference to a future period or by the use of forward-looking
terminology.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Our business has been
undergoing substantial change which has magnified such
uncertainties. Readers should bear these factors in mind when
considering such statements and should not place undue reliance on
such statements. Forward-looking statements involve a number of
assumptions, risks and uncertainties that could cause actual
results to differ materially. In the past, actual results have
differed from those suggested by forward-looking statements and
this may happen again.
Important factors that could cause actual results to differ
materially from those suggested by the forward-looking statements
include, but are not limited to, the following: our servicer and
credit ratings as well as other actions from various rating
agencies, including the impact of downgrades of our servicer and
credit ratings; adverse effects on our business as a result of
regulatory investigations or settlements; reactions to the
announcement of such investigations or settlements by key
counterparties; increased regulatory scrutiny and media attention;
claims, litigation and investigations brought by government
agencies and private parties regarding our servicing, foreclosure,
modification and other practices, including uncertainty related to
past, present or future investigations, litigation, and settlements
with state regulators, the CFPB, State Attorneys General, the SEC,
Department of Justice or HUD and actions brought under the False
Claims Act by private parties on behalf of the United States of
America regarding incentive and other payments made by government
entities; any adverse developments in existing legal proceedings or
the initiation of new legal proceedings; our ability to effectively
manage our regulatory and contractual compliance obligations; our
ability to contain and reduce our operating costs, including our
ability to successfully execute on our cost improvement initiative;
the adequacy of our financial resources, including our sources of
liquidity and ability to sell, fund and recover advances, repay
borrowings and comply with debt covenants, including the financial
and other covenants contained in them; volatility in our stock
price; the characteristics of our servicing portfolio, including
prepayment speeds along with delinquency and advance rates; our
ability to successfully modify delinquent loans, manage
foreclosures and sell foreclosed properties; uncertainty related to
legislation, regulations, regulatory agency actions, government
programs and policies, industry initiatives and evolving best
servicing practices; as well as other risks detailed in Ocwen's
reports and filings with the Securities and Exchange Commission
(SEC), including its annual report on Form 10-K for the year ended
December 31, 2016 and any current and quarterly reports since such
date. Anyone wishing to understand Ocwen's business should
review its SEC filings. Ocwen's forward-looking statements
speak only as of the date they are made and, we disclaim any
obligation to update or revise forward-looking statements whether
as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION CONTACT:
Investors:
Stephen Swett
T: (203) 614-0141
E: shareholderrelations@ocwen.com
Media:
John Lovallo
T: (917) 612-8419
E: jlovallo@levick.com
Dan Rene
T: (202) 973 -1325
E:drene@levick.com
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