Ocwen facing litigation wave

From: http://www.bizjournals.com/southflorida/stories/2006/01/23/story3.html

Dated Friday, January 20, 2006
Ocwen Financial, one of the nation's largest servicers of mortgages to consumers with low credit scores, may appeal a $1.8 million judgment in Texas as it strives to deal with hundreds of cases alleging fraud.
Plaintiff lawyers are currently seeking class action status for 57 federal cases being consolidated in Chicago and the West Palm Beach company says it is facing 331 lawsuits altogether. Ocwen (NYSE: OCN) previously wound down its savings and loan subsidiary after an enforcement action by the Office of Thrift Supervision.
The allegations are sometimes harsh - one plaintiff describes the company's actions as "naked fraud" - but Ocwen general counsel Paul Koches said the lawsuits are partly due to the fact that subprime loans have a higher incidence of late payments. The sheer volume of Ocwen's business also is a factor: It services about 368,000 loans, mostly subprime.
Jury: Award $11.5 million
Among past customers is Sealy Davis, a home equity loan borrower, who won her fraud claim in Texas. A jury on Nov. 29 said she should get $11.5 million. On Jan. 17, Judge Susan Criss, of Texas' 212th Judicial District, said she was preparing to sign an order cutting that to $1.8 million.
Davis' attorney, Robert Hilliard of Corpus Christi, said: "The jury believed that Ocwen has a scheme of stealing homes" by classifying timely payments as late and then beginning a foreclosure proceeding.
"We think the evidence supported the $11.5 million verdict," he said. He proposed the lower figure based on what he determined to be Texas precedents on juries' multiple damage assessments.
Attorneys for Ocwen asked that the verdict be reversed or that no penalty should be assessed.
In its appeal, Ocwen plans to keep pressing that Davis was in "severe delinquency," Koches said.
But Ocwen probably isn't done with Hilliard. The attorney said he is preparing to file about 100 suits for Texas residents who claim Ocwen falsified mortgage payments and began foreclosure proceedings.
An exact number of suits that customers have filed against Ocwen and its former Ocwen Federal Bank subsidiary was not readily available.