Judgment on $31,000 Mortgage Costs Servicer $1.8 Million

Ocwen seeks reversal of Texas judgment
By MortgageDaily.com staff
2/14/2006

A Florida-based nonconforming mortgage servicer seeks reversal of a $1.8 million judgment connected to a $31,000 home improvement loan.

The judgment against Ocwen Loan Servicing entered last week by a Galveston, Texas, judge is based on a $5,000 actual damage award, but includes over $1 million for the borrower's attorneys' fees, as well as statutory and other damages, parent Ocwen Financial Corp. announced Monday.

The case involves a $31,000 home improvement loan the borrower was unable to keep current. Ocwen, hired to service the loan after it was granted by another financial company, sought to resolve the borrower's dispute, but she and her attorney were unwilling, according to the announcement.

The West Palm Beach-based company said it is filing a motion requesting the trial judge to either set aside the verdict or grant a new trial, and if necessary, it will take an appeal to higher courts.

"There's a myth out there that mortgage lenders and loan servicers somehow profit on foreclosures," Ocwen President Ronald Faris said in the written statement. "In reality, it's just the opposite -- lenders and servicers actually lose money when that happens.

"We want the opportunity to re-present our facts to the court and the community," Faris said, noting Ocwen finds win-win solutions in long-overdue loans more than 75 percent of the time and last year found alternatives to foreclosure with 32,900 severely-delinquent loans.

"We make sure our employees are aligned with this effort by paying them incentive bonuses when they succeed in keeping borrowers in their homes," he added.

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