A case levied against Ocwen Financial Corporation (NYSE: OCN) by the Consumer Financial Protection Bureau (CFPB) in 2017 has been dismissed by a federal judge in Florida, though the Bureau has the option to refile the case if it so chooses, according to a story in National Mortgage News.
Originally filed by the Bureau in early 2017, the lawsuit alleges a host of violations on the part of Ocwen, including illegally foreclosing on 1,000 borrowers, mishandling escrow accounts, enrolling consumers in add-on programs without their consent, and knowingly populating its mortgage-tracking software with incorrect or incomplete information.
The basis for the dismissal by Judge Kenneth Marra rested in a concept known as a “shotgun pleading,” which is defined as a legal complaint which offers an excessive number of facts while lacking any semblance of clear organization, and then asserts those disorganized and abundant facts as the basis for a cause of legal action. In answering the complaint against the company, Ocwen offered that it was an example of a shotgun pleading in seeking the case’s dismissal.
Marra agreed with Ocwen, citing legal precedent regarding shotgun pleadings from the Eleventh Circuit Court of Appeals in his reasoning for the dismissal, a court which covers federal jurisdictions in Alabama, Florida and Georgia. However, the case was dismissed “without prejudice,” which will allow the CFPB to refile it should they choose to continue pursuing legal remedies related to Ocwen’s alleged violations.
Ocwen publicly praised Judge Marra’s decision.
“We are pleased that the district court has decided to dismiss the CFPB’s complaint without prejudice,” Ocwen said in a press release responding to the dismissal. “Ocwen will continue to vigorously defend itself should the CFPB refile and continue to pursue its claims. We are committed to our mission of creating positive outcomes for homeowners and communities, and we believe that Ocwen’s servicing practices have and continue to result in substantial benefits to consumers.”
Ocwen has been facing a number of financial difficulties in recent years, though a continuous bright spot for it in terms of business performance has been Liberty Home Equity Solutions, its reverse mortgage lending subsidiary. Most recently, Liberty recorded strong numbers in its reverse mortgage business in Q2 2019 in spite of Ocwen’s larger aim to return to overall profitability, according to financial disclosures released last month along with an accompanying earnings call.
Liberty also recently launched its own proprietary reverse mortgage offering, EquityIQ, which was touted by Ocwen’s leadership as part of Ocwen’s larger initiative to grow its lending volume and achieve a more balanced revenue mix, according to Ocwen CFO June Campbell in August.
Read the original National Mortgage News story on the CFPB case’s dismissal.
