Mortgage -- Struggling to pay mortgage -- Complaint #11415945

Homeowner Denied Assistance, Faces Foreclosure Amidst Medical Crisis

Complaint Overview

Complaint ID: 11415945

Company: Ocwen Financial Corporation

Product: Mortgage

Sub-Product: Conventional home mortgage

Sub-Issue: Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure

State: California

ZIP Code: 92203

Date Received: 2024-12-31T12:00:00-05:00

Date Sent to Company: 2025-01-07T12:00:00-05:00

Company Response: Closed with explanation

Timely Response: Yes

Consumer Disputed: N/A

Submitted Via: Web

Tags: Older American

Risk Assessment

Risk Level: critical

The consumer is facing imminent foreclosure due to a medical emergency and a series of alleged miscommunications and denials of assistance. The company's actions, including the denial of assistance based on lack of income after advising the consumer to omit it, suggest potential violations of consumer protection laws and a high risk of losing their home.

Consumer Sentiment: frustrated

Topics: mortgage-servicing, loss-mitigation, foreclosure-prevention, loan-modification, medical-hardship, ocwen-financial-corporation, phh-mortgage

AI Analysis

This complaint details a deeply distressing situation where a homeowner, PHH Mortgage (now serviced by Ocwen Financial Corporation), faced significant hardship after a medical emergency left them unable to work and earn income. Initially, the homeowner was six months behind on payments, owing $9,300. Despite repeated attempts to seek assistance, they were denied until a third-party advocate intervened, leading to a repayment plan requiring a $6,500 down payment and five monthly payments of $2,200, an increase of $1,100 from their regular mortgage payment. The homeowner, already struggling, agreed to try this plan. Tragically, shortly after making the initial $6,500 payment, they experienced a severe medical issue requiring hospitalization and a minimum of three months off work, impacting their income significantly. When they called to explain their inability to make the first $2,200 installment payment, they were informed their arrangement was in default and they could no longer make payments. They were told they needed to reapply for assistance and would get an appointment with a relationship manager. After reapplying and waiting a month with no contact, they were informed their home was in foreclosure. A subsequent attempt to get assistance, this time with advice to omit income due to medical emergency and include a hardship letter, also resulted in denial, citing the lack of income information. The homeowner feels unfairly treated, believing the company is exploiting their situation and is not acting in good faith, especially given the equity in their home. They are now working with an advocate from 'Save Your Home California' to navigate this complex and distressing process.

Consumer Narrative

I Have a Mortgage with PHH Mortgage. In the beginning of XX/XX/year> I was late with my House payments and behind by 6 Months. The amount I was behind was {$9300.00}. During those 6 months I kept trying to apply for assistance and I continued to get turned down. The house was ready to go into Foreclosure and they wouldnt work with me. I reached out to XXXX XXXX at Save your Home California and he began to help me with my Mortgage Company. They Finally agreed to a repayment plan of {$6500.00} down and then XXXX payments of {$2200.00} for 5 months beginning XX/XX/year>. I told them that I was struggling to pay my mortgage payment to begin with and now they want to add {$1100.00} more a month to my payment? I told them I dont think I would be able to do that but I would try. They did not care and said its the only was to keep your home. so I greed and made my first Payment of {$6500.00} by Credit Card over the phone that afternoon and faxed all required paperwork back to them. On XX/XX/year> I got XXXX and on my third day I had XXXX XXXX and ended up in the XXXX. I was unable to return back to work and had to go on leave for minimum of 3 moths for therapy and doctors visits. My XXXX and XXXX XXXX were impacted very much so. I no longer had any income until my doctors and company agreed to my XXXX Leave. Anyways I did struggle to come up with my first installment payment of $ XXXX My last pay Check from my employer and on XX/XX/year> I called to make that payment. I was told I could no longer make any Payments as my payment arrangement was not kept as agreed and I was now in default. I asked to please speak to my relationship XXXX. I was refused an appointment as they said there was no appt available. They said I could reapply for mortgage assistance and they would then give me an appointment with my relationship manage. So I agreed and they set up and appt for a month away. I went online and applied. and then I waited to hear back. A whole month passed and I never heard anything and I never received that call from my Relationship Manager at all. On XX/XX/year> I called PHH Mortgage again and i still was unable to speak to any relationship Manager. The girl told me that my house was now in foreclosure. She said there was no sale date yet and would set up another appt with a relationship manager. She said I could try a Mortgage assistance application to put the foreclosure on hold while it was being reviewed and it would take up to 30days. She said when I apply this time since its a medical emergency to make sure I dont include any income information since there is no income right now. And make sure I send Hardship letter stating information about the XXXX and Doctor information.So I did what she told me to do. That same day XX/XX/year> I faxed it back to them. Again I never heard a word back. Then on XX/XX/year> I recieved a letter in the mail stating that I was refused assistance because I did not include any income information on my application. I called them right away and I was told I would have to set up appt with Relationship Manager once again. So i did. Then before my appt with them ... XXXX XX/XX/year> I receieved another letter saying my house was now in foreclosure and to contact the attorney on the letter. I immediately reached out to XXXX XXXX at Save your home California and he is in the process of helping me with them since they refuse to help me or explain anything to me or whatever. He is he one that told me to reach out to you and file a complaint. I am hoping you can help me with this issure as I feel I am being treated unfairly and unjustly. They know how much equity is in the home and thats why they refuse to do another modification for me or to help me. I feel through this whole Mortage assistance they are trying to pull the rug out from under me. Its been a Nightmare dealing with PHH Mortgage and nothing has been explained to me correctly. No one is returning my calls or trying to help me resolve this. I dont want to lose the home. I would like to keep it or be given time to resolve this. How can a company be so callous as to not understand that for one ... .I had a medical XXXX, XXXX of them actually. I needed help. And for XXXX ... that if I was struggling to make my regular mortgage payment of XXXX how would i possibly be able to make XXXX even just for 5 months? That is just so wrong. They are an unscrupulous Company with unjust Business Practices. I honestly feel that they didnt explain to me at the time that I HAD to make those next XXXX payments after the {$6500.00} payments ... .on the first or it would be in default. I feel they set me up for failure to begin with and they know that they did and thats why no one will work with me, Explain anything to me or all me back. Bad Business Practices. Just a thought that confuses me and makes me think the reason that they dont want to work with me is that they are changing their name for the 4th time since I got my loan on this house. They will soon be called Onity Mortgage. Many years ago I got behind and they were Called Ocwen Mortgage. They refused to work with me and I almost lost he house then. They had alot of lawsuits against them and alot of people lost their homes because of their unscruptlous practices. So maybe thats why they refuse to work with me.

What You Should Do -- Consumer Action Plan

1. **Continue Working with Your Advocate:** Your 'Save Your Home California' advocate is crucial. Ensure they have all documentation and are actively communicating with PHH/Ocwen on your behalf. 2. **Document Everything:** Keep meticulous records of all calls, conversations (dates, times, names, what was said), letters received, and documents sent. This includes the advice given to omit income. 3. **Formal Written Communication:** If possible, have your advocate send formal written requests for loan modification or other loss mitigation options, clearly outlining your medical hardship and inability to meet the previous terms. 4. **Contact State Agencies:** File a complaint with the California Department of Financial Protection and Innovation (DFPI) and the California Attorney General's office. These agencies oversee mortgage servicers and can investigate potential violations of state and federal law. 5. **Consider Legal Counsel:** If your advocate believes there are strong legal grounds, consult with a housing attorney specializing in foreclosure defense. They can advise on your rights and potential legal actions.

Legal Context & Consumer Protection Laws

The Fair Debt Collection Practices Act (FDCPA) may apply if PHH/Ocwen's collection practices are deemed abusive or deceptive. The Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) govern mortgage servicing and require servicers to provide certain disclosures and handle loss mitigation requests properly. The Consumer Financial Protection Act (CFPA) prohibits unfair, deceptive, or abusive acts or practices (UDAAP), which could be relevant if the company's actions were misleading or harmful.

Regulatory Insight

This complaint pattern, involving alleged miscommunication, denial of assistance during hardship, and potential procedural missteps in loss mitigation, is unfortunately not uncommon in the mortgage servicing industry. CFPB has previously taken enforcement actions against servicers for similar issues, highlighting the need for clear communication and proper handling of borrower requests during times of financial distress. Companies must adhere to RESPA's requirements for evaluating loss mitigation options.

Resolution Likelihood

30%. The consumer has a strong case for unfair treatment, especially given the alleged advice to omit income and subsequent denial. However, the foreclosure process is advanced, and the company's response indicates a closed file. The involvement of an advocate and potential regulatory intervention are positive factors, but the path to a favorable resolution, such as a loan modification or preventing foreclosure, is challenging.

State-Specific Consumer Protections

California has robust consumer protection laws. The California Department of Financial Protection and Innovation (DFPI) is the primary state regulator for mortgage servicers and handles complaints. The California Attorney General's office also has authority to investigate and prosecute unfair business practices.

Industry Comparison

PHH Mortgage (now Ocwen) has historically faced scrutiny regarding its servicing practices. While many servicers can struggle with complex loss mitigation cases, Ocwen has been involved in numerous consent orders and settlements related to servicing errors, suggesting their handling of such situations may be worse than the industry average.

Related Issues

Frequently Asked Questions

What should I do if my mortgage company is refusing to work with me during a hardship?

If your mortgage company is not working with you during a financial hardship, it's crucial to act quickly. First, document every interaction: keep records of calls, emails, and letters, noting dates, times, and the names of representatives. Continue to formally apply for loss mitigation options like loan modifications, forbearance, or short sales, ensuring you submit all required documentation promptly. If the company is unresponsive or denies your requests unfairly, seek assistance from a HUD-approved housing counselor or a non-profit consumer advocacy group like 'Save Your Home California.' These organizations can mediate with your lender and advise on your rights. If these steps don't yield results, consider filing a complaint with the Consumer Financial Protection Bureau (CFPB) and your state's financial regulator (in California, the DFPI). These agencies can investigate and potentially intervene on your behalf.

What are my rights if my mortgage company is pushing me towards foreclosure?

You have significant rights under federal law, primarily the Real Estate Settlement Procedures Act (RESPA). RESPA requires mortgage servicers to evaluate you for loss mitigation options if you apply before foreclosure proceedings are too advanced. They must inform you about available options and cannot move for foreclosure until they have reviewed your application or you have indicated you will not pursue an option. The Consumer Financial Protection Act (CFPA) also prohibits unfair, deceptive, or abusive acts or practices, which could apply if the servicer misled you or acted in bad faith. If you believe your rights are being violated, consult with a housing counselor or an attorney specializing in foreclosure defense. You can also file a complaint with the CFPB and your state's Attorney General or financial regulator.

Should I file a complaint against my mortgage company?

Yes, filing a complaint is often a necessary step when you feel a mortgage company has treated you unfairly or violated your rights. Start by gathering all relevant documentation: loan statements, communication logs, application forms, denial letters, and any correspondence. Identify the appropriate agencies to file with. The Consumer Financial Protection Bureau (CFPB) is a primary federal agency for mortgage complaints. Your state's financial regulator (e.g., the California Department of Financial Protection and Innovation) is also critical. Clearly and concisely describe the issue, including dates, names, and specific actions taken by the company. Mention any attempts you made to resolve the issue directly. A well-documented complaint can trigger an investigation and potentially lead to a resolution or enforcement action against the company.

What is Ocwen's track record with mortgage servicing?

Ocwen Financial Corporation, which now services mortgages originally held by PHH Mortgage, has a history of facing regulatory scrutiny and enforcement actions related to its mortgage servicing practices. The company has been involved in numerous consent orders and settlements with federal and state regulators, including the CFPB, Department of Justice, and various state Attorneys General. These actions often cite issues such as improper handling of loan modifications, foreclosure process errors, inadequate customer service, and violations of consumer protection laws. While Ocwen has stated commitments to improving its practices, its past record suggests that consumers facing difficulties with loan modifications or loss mitigation may encounter challenges. It's advisable for consumers working with Ocwen to be extra diligent in documenting all communications and seeking external assistance if needed.

What are my options if I can't afford my mortgage payment after a medical emergency?

If a medical emergency makes it impossible to afford your mortgage payments, your primary options involve seeking 'loss mitigation' from your servicer. This includes applying for a loan modification (changing the terms of your loan to make payments more affordable), forbearance (temporarily pausing or reducing payments), or exploring alternatives like a short sale or deed-in-lieu of foreclosure if you cannot keep the home. It's crucial to contact your mortgage servicer *immediately* and explain your situation. Apply for any assistance programs they offer, providing documentation of your medical hardship (doctor's notes, proof of leave). If the servicer is uncooperative, seek help from a HUD-approved housing counselor. They can guide you through the process and advocate on your behalf. Remember to keep detailed records of all communications and applications.

How will being denied mortgage assistance and facing foreclosure affect my credit score?

Being denied mortgage assistance and subsequently facing foreclosure can significantly and negatively impact your credit score. When you fall behind on payments, even if you eventually enter a repayment plan or modification, those late payments will be reported to credit bureaus, lowering your score. If your loan goes into foreclosure, this is a severe derogatory mark that will remain on your credit report for seven years and drastically reduce your score. This makes it very difficult to obtain new credit, such as car loans, credit cards, or even rent an apartment, for many years. Even if you avoid foreclosure, a history of missed payments and multiple applications for assistance can signal risk to future lenders. It's essential to try and resolve the situation before it escalates to foreclosure.

Are there class action lawsuits against mortgage companies for unfair practices?

Yes, class action lawsuits are frequently filed against mortgage companies for alleged widespread unfair or deceptive practices. These lawsuits often arise from issues like improper fees, errors in loan servicing, wrongful foreclosures, or mishandling of loan modification applications. If a company's actions have affected a large group of consumers in a similar way, a class action can provide a mechanism for collective redress. To find out if there are active class actions relevant to your situation, you can consult legal resources online, check with consumer advocacy groups, or speak with an attorney specializing in class action litigation or consumer protection law. Attorneys often offer free initial consultations, and you can also look for information on websites that track class action settlements.

Disclaimer

This analysis is generated by an AI and is not a substitute for professional legal or financial advice.