Ocwen is familiar to bankruptcy attorneys because it is the name of a dark force in real estate predation. (At the end of this post I’ll tell you an Ocwen war story from my own practice that gives a little taste of what my clients have faced with them.) It is also a name that has been in several recent articles in the Los Angeles Times. The articles chronicle the fall of Ocwen in California, leading up to California’s move to deport Ocwen from the Golden State. It couldn’t happen to a more deserving entity.
I. Insurance Fraud
I’ll start with the September 17, 2014, L.A. Times article, which is really beginning near the end of California’s Ocwen story, because one can only take just so much wallowing in a cesspool of moral and financial degradation. In that article, E. Scott Reckard reported:
Tyesha Hansborough and her husband, Christley Paton, had paid the property insurance on their Inglewood home along with their mortgage, putting the money in escrow like most homeowners. Trouble is, the couple said, their mortgage servicer — Ocwen Financial Corp. — didn’t pass that money on to the insurance company for this year’s premiums. They battled unsuccessfully for months to reinstate the lapsed policy without additional costs, the couple said. Ocwen instead imposed so-called force-placed insurance — expensive coverage that protects the lender’s interest but doesn’t shield the homeowners from loss.
Isn’t that a cute trick? Collect insurance premiums from the homeowner and then charge them again, for Rolls-Royce priced insurance. That’s how to turn a real profit. Don’t waste time with honest business practices: That’s for suckers.