"Ocwen settles with state on loan problems" by Margeaux Sippell Globe Correspondent April 03, 2018
The Massachusetts Division of Banks wrapped up a long-running investigation of mortgage servicer Ocwen with a $1 million fine for numerous problems involving the Florida company’s administration of home loans.
The settlement is related to a cease-and-desist order Massachusetts officials obtained against Ocwen in April 2017, part of broad national action by regulators from more than 30 jurisdictions for deficient loan-servicing practices. In 2013, Ocwen had been ordered by the US Consumer Financial Protection Bureau and multiple states to pay consumers $2 billion for providing false information during foreclosure proceedings and charging borrowers unauthorized fees during the housing crisis.
They stole your home.
So what is your cut of that?
The federal agency and the Massachusetts attorney general sued Ocwen again in 2017 over similar charges, such as allegedly forcing borrowers to buy unnecessary and expensive insurance.
A Massachusetts consent order issued March 23 limits Ocwen’s new mortgage activities until it can transfer the 33,000 loans it currently holds in the state to a new service platform and undertake other corrective measures, including a data-integrity review of consumer loan information.
“This Order continues the Division’s efforts to stop unscrupulous loan servicing practices and implement actions to ensure consumers’ funds are safe and accounted for properly,” Commissioner of Banks Terence McGinnis said in a statement.
An Ocwen spokesman, John Lovallo, said in a statement that the company is “pleased to have reached resolution with Massachusetts.”
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Related:
"Barclays to pay $2b for selling toxic mortgages" by Renae Merle Washington Post March 29, 2018
After a three-year investigation, the Justice Department said Thursday that it had reached a $2 billion settlement with Barclays, a giant British bank that federal prosecutors say sold toxic mortgages that contributed to the global financial crisis.
Prosecutors say that between 2005 and 2007 Barclays sold investors packages of mortgages that were worth less than the bank claimed, costing the investors billions of dollars. More than half of the $31 billion in mortgage packages eventually defaulted, prosecutors said. The settlement ‘‘is an important step in recognizing the harm that was caused to the national economy,’’ Richard Donoghue, US attorney for the Eastern District of New York, said in statement.
But, for Barclays, the settlement may also be a triumph. The penalty could have been much bigger, industry analysts say. The bank also didn’t have to admit wrongdoing.
It was a pittance of a kickback to a government that allowed it to occur, and nothing has changed in 10 years.
‘‘The settlement came at the bottom end of expectations and much sooner than expected,’’ Ian Gordon, an analyst at Investec, said in a research note, according to Bloomberg.
Barclays is paying much less than some other big banks who have faced similar allegations. In 2013, JPMorgan Chase paid $13 billion. In 2014, Bank of America agreed to a record-setting $16 billion settlement. Deutsche Bank paid $7 billion earlier this year.
How much profit did they make before and since?
Unlike many of those big banks, Barclays initially balked at paying a large fine. The Justice Department under the Obama administration was asking for as much as $8 billion from the British bank, according to industry analysts and media reports at the time. The Wall Street Journal reported then that the bank was being asked to pay about $5 billion. But Barclays wanted to pay much less, $1.5 billion to $2 billion, according to various media reports.
So the settlement ended up being what the bank wanted!
When they couldn’t reach an agreement, the Justice Department took the unusual step of suing Barclays in the waning days of the Obama administration. Then-Attorney General Loretta Lynch lashed out at the bank. ‘‘Barclays jeopardized billions of dollars of wealth through practices that were plainly irresponsible and dishonest,’’ she said.
But Barclays vowed to fight the lawsuit, saying it had an obligation to its shareholders to defend itself against ‘‘unreasonable allegations and demand.’’
Barclays recently approached the Justice Department to restart negotiations, according to two people familiar with the matter, who were not authorized to speak publicly.
In a statement Thursday, Barclays chief executive Jes Staley said he was pleased to reach a ‘‘fair and proportionate settlement,’’ adding, ‘‘It has been a priority for this management team from the start to resolve these historic issues in a timely and appropriate manner wherever possible.’’
The Justice Department also extracted $2 million from two former Barclays executives, Paul Menefee and John Carroll. But neither admitted wrongdoing, and both remained defiant despite the settlement.
Menefee agreed to settle the case so he could put the matter behind him, his attorneys said in a statement.
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