Ocwen

Exclusive: Big mortgage investors take first step toward suing Ocwen

(Reuters) – Major mortgage bond investors including BlackRock (BLK.N), MetLife (MET.N) and Pimco (ALVG.DE) on Friday took a first step toward suing Ocwen Financial Corp (OCN.N), accusing it of having failed to properly collect payments on $82 billion of home loans, according to a person familiar with the matter and to documents seen by Reuters.

The group sent a formal notice of non-performance to Ocwen and trustees for 119 residential mortgage-backed securities trusts, alleging improper loan modification practices, wrongfully recouped advances, and a failure to account for cash flows.

The notice said that Ocwen also steered work to affiliates such as Altisource Portfolio Solutions (ASPS.O) and Home Loan Servicing Solutions (HLSS.O) for allegedly unnecessary or overpriced mortgage servicing to the detriment of the trusts, investors and borrowers.

The investors said the trusts had losses of more than $1 billion because of Ocwen’s failings.

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