Information Regarding Ocwen Financial Corp.
On April 20, 2017 the Consumer Financial Protection Bureau (CFPB) issued an enforcement action against Ocwen Financial Corp. for issues relating to mortgage loan servicing, including the handling of escrow and foreclosures.
If you believe you may be impacted by this action, you may contact the OSBC at 785-296-5384 or firstname.lastname@example.org.
Frequently Asked Questions
What will happen if the servicer of my mortgage changes?
If your mortgage servicer changes, the following items are required by federal law:
- Your current and new servicer must provide you written notification of the details of the transfer within 15 days prior to or following the effective date of transfer. The notice must include the transfer effective date and contact information for the new servicer.
- The terms and conditions of your mortgage must be honored by the new servicer.
- Should you mistakenly send a timely payment to your old servicer, your new servicer cannot charge you a late fee for 60-days from the date of servicing transfer.
Will I be contacted by phone if I am affected by the Ocwen order?
No. In fact, a large public action against a company of this magnitude may provide an opportunity for scams. Do not give out any personally identifiable information to someone who calls you.
If you feel the call is legitimate, and would like to follow up with the company, inform the individual that you will contact the servicer directly later regarding the call. Then, only call a verified phone number for the servicer such as one that has been provided on a monthly statement or a servicing transfer statement to inquire about your situation.
Is there anything I should do to protect myself if my loan has been transferred to a new servicer?
The following items are important when your loan is transferred to a new servicer:
- Continue to make your payments.
- Pay special attention to the servicing of your loan, including the application of payments to principal and interest, taxes and insurance, and any other required fees.
- Retain copies of all statements, letters, canceled checks, or other documents related to your mortgage loan servicing so that you have documentation to rely upon should a dispute arise with the handling of your mortgage servicing.
What happens if my mortgage servicer changes? What do I do?
If the servicing rights for your loan are sold and you get a new servicer, your old and new servicers must notify you of the transfer of the servicing rights to your loan. The notice should disclose to you the date on which your old servicer will stop accepting payments and the date on which your new servicer will begin to accept payments. It should also disclose the new servicer's name, customer inquiry address, telephone number for an employee or department of the new servicer, and the effective transfer date.
If your loan servicer changes, carefully review your monthly mortgage statement to confirm that your payments are being accurately credited. Failure to send your payments to the right servicer after you receive notification that the servicing rights on your loan have been sold could result in your payments not being credited properly.
Additionally, for 60 days beginning on the effective transfer date of the servicing rights from your previous servicer to your new servicer, your new servicer cannot charge you a late fee or treat the payment as late if you sent it to you previous servicer on time or within the applicable grace period.
Generally, the entity that is selling the servicing rights must provide you with a notice not less than 15 days before the effective date of the transfer and your new servicer must deliver a transfer notice not more than 15 days after the effective transfer date. If the two notices are combined, then the combined notice must be delivered to the borrower not less than 15 days before the effective transfer date.
What's the difference between a mortgage lender and a servicer?
Your mortgage lender is the financial institution that loaned you the money. Your mortgage servicer handles the day-to-day tasks of managing your loan. Your loan servicer typically processes your loan payments, responds to borrower inquiries, keeps track of principal and interest paid, manages your escrow account, and may initiate foreclosure if you miss too many loan payments. Your servicer may or may not be the same company that gave you your loan.
To find out who your servicer is:
- Check your monthly mortgage billing statement or payment coupon book
- Dial the MERS® Servicer Identification System toll-free at 888-679-6377 or visit the MERS® website. Your loan servicer's identity may be listed in the MERS system.
What does a servicer do?
The mortgage servicer is the company that collects your monthly payments. That company is not necessarily the lender that made the loan.
When the servicer receives your payment, it distributes the money:
- Principal and interest go to the bank or the investor that owns the loan.
- Taxes go to the government.
- Homeowners insurance premiums go to the insurer.
- Mortgage insurance premiums go to the mortgage insurer.
- Condo or homeowners association dues go to the association.
- Any other fees are disbursed to wherever they're supposed to go.
Other duties of the servicer
Besides collecting payments and distributing the money, the servicer:
- Sends you an annual mortgage statement that details which portions of your mortgage payments were applied to principal, interest, taxes and insurance, and any adjustments in payments to cover taxes and insurance in the coming year.
- Counsels and helps you to overcome delinquencies if you miss loan payments. For instance, a forbearance, or deferral of principal and interest payments, may be extended to help you out of financial difficulties. If the loan becomes seriously in default, foreclosure might be necessary to protect the investor's interest in the property and salvage the borrower's equity, if any.
Rules of servicer change
- You must be notified in writing of the change by your original servicer and the new one, noting the date of transfer and contact information of the new servicer.
- The new servicer must honor the terms and conditions of your original mortgage agreement, with the exception of those directly related to servicing the loan.
- You must be notified of any changes to terms of your homeowners insurance.
- During the transfer, you have a 60-day grace period during which you cannot be charged a late fee if you mistakenly send a mortgage payment to your old servicer.
- You may ask any questions or voice any disputes you have with the new servicer in writing and continue to make payments while you settle the dispute.
- Federal law requires the servicer to investigate your disputes and make any corrections within 60 business days.
Pay attention to your loan servicing at the new company
After your mortgage servicer has changed, carefully examine your mortgage statements, making sure all payments have been recorded and taxes and insurance premiums have been paid on time. Retain copies of letters, canceled checks and other paperwork relating to your mortgage and payments in case you need to document any dispute.