Trustees of The United Food & Commercial Workers Union & Employers Midwest Pension Fund, on behalf of that plan and other similarly situated benefit plans v. Ocwen Financial
Powell v. Ocwen Financial Corporation (1:18-cv-01951), District Court, S.D. New York
“Defendants Ocwen’s and Wells Fargo’s motions to dismiss the FAC, (Docs. 90, 105), are hereby converted to motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 with respect to the following two issues: (1) whether the underlying mortgages in the AHMI Trusts qualify as “plan assets” of the UFCW Plan; and, if so, (2) whether Ocwen qualifies as a fiduciary of the UFCW Plan. Plaintiffs, Ocwen, and Wells Fargo are directed to meet and confer regarding the scope of and schedule for limited discovery on these two threshold issues.” – Judge Vernon S. Broderick, March 2019
Fitch Ratings announced earlier this month that it does not expect to change any RMBS bond ratings in response to PHH Mortgage Corporation (PMC) assuming a mortgage sub-servicing role to Ocwen Loan Servicing (OLS).
Earlier this year, Fitch also announced that the PMC merger with Homeward Residential would not impact RMBS ratings either.
According to Fitch, Ocwen’s primary servicer ratings are currently ‘3-‘ with a Stable Outlook, while PMC’s primary servicer ratings are currently ‘3’ with a Stable Outlook.
As of Dec. 31, 2018, Ocwen’s residential servicing portfolio consisted of approximately 1 million loans totaling $149 billion. This included approximately 785,000 loans totaling $114 billion in more than 2,800 non-agency RMBS transactions.
Ocwen, along with Wells Fargo, was recently accused of exploiting homeowners during the financial crisis, and on Monday, a New York Federal Judge decided not to rule on the bids to toss out the proposed Employee Retirement Income Security Act (ERISA) class action suit.
In March 2018, trustees of the United Food & Commercial Workers Union & Employers Midwest Pension Fund alleged that Ocwen had pushed homeowners into foreclosure during the financial crisis in 2007 and 2008, in order to profit off foreclosures, while Wells Fargo stood by instead of supervised.
While the trustees have claimed that the conditions necessary to move forward with the ERISA claim, the judge stated that Ocwen and Wells Fargo had submitted evidence that suggested otherwise.
U.S. District Judge Vernon S. Broderick tossed a number of the other dismissal arguments without prejudice to potentially be refiled after those motions were decided.
“The [first amended complaint] also asserts that Ocwen ‘exercised sweeping, unchecked control of the management and disposition of securitized mortgages, and was a fiduciary under ERISA to the benefit plans that invested in those mortgages,'” the judge said. “Ocwen and Wells Fargo, however, have filed numerous exhibits in conjunction with their motions to dismiss, which cast considerable doubt on plaintiffs’ ability to support these allegations.”
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