Ocwen to hire independent firm to probe backdated foreclosure letters

Ocwen Loan Modification Help 

Ocwen Financial Corp said it was hiring an independent firm to investigate how the mortgage servicer had sent backdated letters to borrowers about loan modifications and foreclosures and the reason for the delay in fixing the issue.

Hundreds of thousands of borrowers facing foreclosure may have been harmed after they received letters from Ocwen with cure dates that had passed months earlier, New York Financial Services said on Tuesday.
The company denied them loan modifications in letters that they received more than 30 days after they were mailed, cutting off an opportunity to appeal, according to an Oct. 21 letter from the New York Financial Services to Ocwen.
Ocwen's Chief Executive Ron Faris wrote a letter to homeowners on Friday apologizing for the improperly dated letters, as well as to clarify what happened, explain the actions the company had taken to address the issue, "and to commit to ensuring that no borrower suffers as a result of our mistakes".
"Historically such letters were dated when the decision was made to create the letter versus when the letter was actually created," Faris wrote in the letter.
"In most instances, the gap between these dates was three days or less. In certain instances, however, there was a significant gap between the date on the face of the letter and the date it was actually generated."
The company, one of the largest U.S. mortgage servicers, was continuing to investigate all letters to check if any of them had been "inadvertently misdated", the letter said.
Atlanta-based Ocwen on Tuesday had blamed the improperly dated letters on software errors and that it had resolved the errors identified as of that date.
The company's statement on Tuesday had said 283 New York borrowers received letters with incorrect dates. Ocwen amended the statement later that day to say it was aware of borrowers in New York beyond the 283 who received letters with incorrect dates but did not know yet know how many.
Faris' letter on Friday did not mention how many borrowers had received such letters, but he added Ocwen believed its backup checks and controls had prevented any borrower from a foreclosure due to the improperly dated letters.
He said Ocwen would work with its advisory council, made up of 15 nationally recognized community advocates and housing counselors, on "making things right for any borrowers who may have been affected in any way by this error".
Up to Friday's close of $19.27, Ocwen shares had fallen nearly 27 percent.