United States of America et al v. Ocwen: Judge Rules Docs Admissible in HAMP False Claims Act Case
“In 2009, Ocwen Financial Corp. participated in the U.S. Department of Treasury’s Home Affordable Modification Program and the relators allege the company lied about its compliance with the program’s guidelines, according to court documents. HAMP helps homeowners avoid foreclosure by lowering interest rates and payments, extending terms and forgiving principal, but in OFC’s case, it allegedly led to homeowners losing their properties while executives took nearly $2 billion in incentive payments from the government.”
United States of America et al v. Ocwen: Docs Admissible in False Claims Act Case
A Texas federal judge on Tuesday determined that banking documents related to a state government investigation into Ocwen Loan Servicing LLC’s financial practices, which the company claims to have “inadvertently disclosed” to relators bringing a pair of False Claims Act suits, are not privileged and can be used at trial.
Ocwen Loan Servicing, and subsidiaries Ocwen Financial Corp. and Homeward Residential Inc. are facing a pair of lawsuits brought by relators Michael J. Fisher and Brian Bullock alleging the companies provided false information to a federal loan program. U.S. District Judge Amos L. Mazzant on Tuesday rejected an argument from Ocwen that the reports produced by the West Virginia Division of Financial Institutions, according to West Virginia law, “shall be confidential,” because the documents discuss the financial condition of the loan servicing company.
The court found that the state’s laws actually explicitly say that in the context of a civil enforcement brought by a state or regulatory authority, that information can be disclosed. In this case, the relators “stand in the shoes of the state,” he wrote, which permits disclosure.
The cases are the United States of America et al v. Ocwen Loan Servicing LLC et al, case number 4:12-cv-00543, and United States of America et al. v. Homeward Residential Inc. et al, case number 4:12-cv-00461, in the U.S. District Court for the Eastern District of Texas.