State and federal authorities have sued mortgage servicer Ocwen Financial Corp., saying the company botched the handling of millions of mortgage accounts. The action sent shares of Ocwen plunging more than 50 percent.
The Consumer Financial Protection Bureau said Thursday that the accounts Ocwen serviced were riddled with errors throughout the repayment process. It said the company would go after borrowers long before verifying whether the debt was valid, allegedly foreclosed illegally on at least 1,000 homeowners, and charged borrowers for add-on products without their consent.
Those are just a few of the violations the CFPB alleged in its 93-page complaint. In extremely heavy trading, Ocwen shares fell 54 percent to $2.49 a share, a sign that Wall Street may have lost confidence in the company's future.
Ocwen, which is based in West Palm Beach, Florida, called the lawsuit "politically motivated" and disputes the CFPB's allegations. The company is one of the nation's largest non-bank mortgage servicers, focusing mostly on subprime and delinquent mortgages, handling 1.4 million mortgages in all 50 states as well as Washington, D.C., worth roughly $209 billion.