CFPB Seeks To Intervene In $2B Ocwen False Claims Act Suit, Concerned its “Effectiveness as a Financial Regulator Could be Compromised”
Law360, New York (June 16, 2016, 3:30 PM ET) — The Consumer Financial Protection Bureau has asked a Texas federal court to let it intervene in a whistleblower suit alleging Ocwen Loan Servicing LLC gave false information to a federal loan program that allegedly netted executives $2 billion in incentive payments, saying it needs to protect confidential, privileged records pertaining to its supervision of Ocwen.
The CFPB filed the motion Monday in a False Claims Act suit against Ocwen Loan Servicing, a subsidiary of Ocwen Financial Corp., over its participation in a U.S. Department of Treasury Home Affordable Modification Program in 2009, telling U.S. District Judge Amos Mazzant that its effectiveness as a financial regulator could be compromised if the information is made public.
“As the courts have long recognized, effective supervision of financial institutions depends upon the mutual assurance that communications between the examiners and the officials of the examined entities will remain confidential under the protection of the Federal bank examination privilege,” the motion said.
Relators Michael J. Fisher and Brian Bullock, who helped Ocwen’s clients modify their mortgage loans, filed the suit in 2014, alleging Ocwen lied about complying with the program guidelines of the Home Affordable Modification Program, which is designed to lower interest rates and payments, extend terms and forgive principal to help homeowners avoid foreclosure.