Arbitration Panel Awards Divorced Spouse Nearly $2 Million for Being Refused Loss Mitigation
Chicagoland Consumer Advocates’Award Against One of America’s Largest Mortgage Loan Servicers Includes Compensatory, Punitive Damages and Homeowner’s Attorney’s Fees
CHICAGO, Oct. 21, 2022 /PRNewswire/ — Consumer lawyers Nick Wooten, Rusty A. Payton, and Adam J. Feuer, have obtained a substantial verdict for their client in a consumer fraud case against PHH Mortgage Services, a wholly owned subsidiary of Ocwen Financial Corporation. Ocwen denied the consumer loss mitigation and refused to follow Freddie Mac guidelines to assist homeowners going through a divorce.
The award is significant because it demonstrates that Ocwen / PHH has harmed thousands of divorcing homeowners by refusing them loss mitigation during divorce as a matter of corporate policy. Policy which directly conflicts with Ocwen / PHH’s obligations under Federal law and Freddie Mac guidelines.
“Our client was mistreated for nearly five years because Ocwen simply refuses to follow the law. Ocwen’s conduct maintains a long-time trend of abusing homeowners and ignoring legal obligations. Ocwen engaged in tactics that made it impossible for our client to get the relief she was entitled to, eventually suing her for foreclosure in early 2018,” said Rusty A. Payton. “Ocwen then dangled an offer of help and received payments intended for loss mitigation only to later snatch the offer away. Ocwen mistreats divorcing borrowers in need of a loan modification. Our client is relieved that this long nightmare appears to be drawing to an end.”
“PHH’s unvarnished illegality strips divorcing consumers of their rights under Federal law. Divorcing couples have a right to loss mitigation and loan modifications in the name of the borrower retaining the home. PHH ignores and tramples on those rights. We were glad to help our client in this case but who knows how many thousands of homeowners have lost their home due to Ocwen’s abuse of divorcing borrowers.” said Nick Wooten, the lead trial attorney and a consumer lawyer with more than 25 years of experience trying similar cases against the nation’s largest mortgage servicers, including Ocwen. “At Ocwen / PHH, violating and ignoring consumers’ rights is business as usual.”
After filing suit, the consumer agreed with Ocwen to arbitrate the dispute during the COVID pandemic in a binding arbitration through the American Arbitration Association. The culmination of that process was a six day arbitration hearing conducted by a JAMS Arbitrator who is a retired Cook County Circuit Court Judge.
In her award, the Arbitrator noted: “Corporate actions and indifference, when practiced to the harm of a targeted group, can easily be described as malicious. For Claimant, the actions of the loan modification process in December 2018 through June 2019 may not have begun as intentionally malevolent, but clearly evolved into deceit. Claimant’s request for punitive damages is supported by the record.”
The Arbitration final award was issued on September 29, 2022. The consumer has moved the United States district court to confirm the award and enter an enforceable money judgment.
“Ocwen’s counsel has represented that they will contest entry of judgment, at least in part, on the grounds that the arbitrator was guilty of misconduct or misbehavior, an allegation that is both baseless and repugnant to her reputation and the professional manner in which she conducted the hearing,” adds Payton.
“Matrimonial attorneys, divorcing spouses, and consumer lawyers should all be on the lookout for mortgage servicers denying divorced or divorcing couples loss mitigation This misconduct seems rampant today,” adds Adam J. Feuer. “Homeowners who are experiencing similar deceptive or abusive conduct from their mortgage servicer should know that there are powerful tools available to hold these companies to account, and we are here to help.”
Wooten recently became head of consumer litigation for Austin, Texas based DC Law advocating for consumers with a national reach. Payton is the principal of Payton Legal Group and Feuer is the principal of Chicagoland Consumer Advocates. The trial team can be reached by calling 773-945-9880.
The case is Albeck v. PHH Mortgage Corp., No. 20-cv-07727, United States District Court, Northern District of Illinois.
Ocwen was represented at the hearing by attorneys Simon Fleischmann and Ryan Sawyer of Locke Lord LLP.
The Arbitrator’s award may be found at: Albeck Final Award.
SOURCE Nick Wooten LLC
Ocwen Financial Corp. Loses $2M In Arbitration
Arbitrator: Lender refused to follow Freddie Mac guidelines to assist homeowners going through a divorce.
KEY TAKEAWAYS
Award includes $750,000 in compensatory damages and $500,000 in punitive damages.
An arbitrator has ruled that PHH Mortgage Services and parent company Ocwen Financial Corp. must pay $2 million to a plaintiff in a consumer fraud case.
According to the plaintiff’s attorneys, PHH and Ocwen denied their client consumer loss mitigation and refused to follow Freddie Mac guidelines to assist homeowners going through a divorce.
The plaintiffs attorneys said in a release this week that the award is significant because it demonstrates that Ocwen and PHH have harmed thousands of divorcing homeowners by refusing them loss mitigation during a divorce as a matter of corporate policy, which directly conflicts with their obligations under federal law and Freddie Mac guidelines.
“Our client was abused for nearly five years because Ocwen simply refuses to follow the law,” said attorney Rusty A. Payton. “Ocwen’s conduct maintains a long-time trend of abusing homeowners and ignoring legal obligations. Ocwen engaged in tactics that made it impossible for our client to get the relief she was entitled to, eventually suing her for foreclosure in early 2018.”
Payton continued, “Ocwen then dangled an offer of help, received payments intended for loss mitigation, only to later snatch the offer away. Ocwen mistreats divorcing borrowers in need of a loan modification. Our client is relieved that this long nightmare appears to be drawing to an end.”
The arbitrator’s award, which is subject to appeal on a limited basis, includes $750,000 in compensatory damages, more than $580,000 in attorneys fees, and $500,000 in punitive damages, according to court records.
In her award, arbitrator Susan Zwick a retired Cook County, Ill., circuit judge, noted that corporate actions and indifference, when practiced to the harm of a targeted group, can easily be described as malicious.
“For claimant, the actions of the loan modification process in December 2018 through June 2019 may not have begun as intentionally malevolent, but clearly evolved into deceit,”
Zwick said.
“Claimant’s request for punitive damages is supported by the record.”
The arbitration final award was issued Sept. 29, and the plaintiff has moved the U.S. District Court to confirm the award and enter an enforceable money judgment, her attorneys said.
“Ocwen’s counsel has represented that they will contest entry of judgment, at least in part, on the grounds that the arbitrator was guilty of misconduct or misbehavior, an allegation that is both baseless and repugnant to her reputation and the professional manner in which she conducted the hearing,” Payton said.
Attorney Adam J. Feuer added that matrimonial attorneys, divorcing spouses, and consumer lawyers should be on the lookout for mortgage servicers denying divorcing couples loss mitigation.
“This misconduct seems rampant today,” Feuer said. “Homeowners who are experiencing similar deceptive or abusive conduct from their mortgage servicer should know that there are powerful tools available to hold these companies to account, and we are here to help.”
Payton added in an email Friday that the award should resonate with Ocwen/PHH and its investors “because it represents almost 20% of the company’s second-quarter net income and, given that this is an ongoing policy failure, we believe there are hundreds of other borrowers who have similar cases.”
Ocwen officials did not immediately respond to a request for comment.
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