WEST PALM BEACH, Fla., Feb. 13, 2006 (PRIMEZONE) -- A subsidiary of Ocwen Financial Corporation (NYSE:OCN) will ask a Galveston, Texas judge to set aside a $1.8 million judgment entered last week in a case involving a $31,000 home-improvement loan that had fallen into delinquency. The judgment against Ocwen Loan Servicing is based on a $5,000 actual damage award, but also includes statutory and other damages, plus over $1 million for the borrower's attorneys' fees. Ocwen is a leader in the non-conforming mortgage industry in resolving seriously delinquent loans, finding "win-win" solutions in long-overdue loans more than 75 percent of the time.
"We are proud of our commitment to customer service and the steps we take to work with borrowers who are behind on their mortgage payments to find ways to resolve their loans to everyone's best interest," says Ronald Faris, Ocwen's President. "We want the opportunity to re-present our facts to the court and the community, knowing that no one works harder than we do in finding win-win solutions in the most difficult situations."
"There's a myth out there that mortgage lenders and loan servicers somehow profit on foreclosures," Mr. Faris explains. "In reality, it's just the opposite -- lenders and servicers actually lose money when that happens, and that's why we put so much effort into resolving delinquencies in a way that avoids foreclosure. We make sure our employees are aligned with this effort by paying them incentive bonuses when they succeed in keeping borrowers in their homes."
Ocwen services non-conforming or "sub-prime" loans originated by other banks and lending institutions. Generally, Ocwen does not own the loans it services. The company publishes a 15-point Customer Commitment Program and provides a special Ombudsman Office as a resource to investigate any questions a customer may have in the servicing of their account. Ocwen's goal is to professionally assist a customer in meeting their loan obligations, using as many solutions as possible to avoid foreclosure.
A consumer advocacy group familiar with Ocwen confirms that the Galveston ruling is contrary to their experiences with Ocwen's resolution-oriented servicing practices. Marilyn Evans, President of the National Training and Information Center ("NTIC"), "is pleased with the efforts Ocwen has shown to keep families in their homes." NTIC is a national organization devoted to "building grassroots leadership and strengthening neighborhoods through issue-based community organizing." NTIC has been working with Ocwen to help prevent foreclosures since February 2005. Ms. Evans applauds Ocwen for its "innovative ways to help preserve homeownership in our communities."
The Galveston trial judge dismissed portions of an original jury verdict in a higher amount, since it violates recent tort reforms now safeguarding the Texas judicial system, but allowed part of the penalty to remain.
The case involved a homeowner's inability to keep payments current on a $31,000 home-improvement loan, which was originally granted to the homeowner by another financial company. After being hired to service the loan, Ocwen sought to resolve the borrower's dispute, but the borrower and her attorney were unwilling.
Ocwen 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.
"Our consultative approach and commitment to customer service has enabled us to find alternatives to foreclosure in 32,900 severe loan delinquencies last year. We will continue to work hard to assist borrowers in need and to mitigate losses for lenders," says Mr. Faris. "Nothing in the Galveston case changes that."
Ocwen Financial Corporation is a leading provider of servicing and origination processing solutions to the loan industry with headquarters in West Palm Beach, Florida, offices in Orlando, Florida and Chicago, Illinois and global operations in Canada, Germany, India and Taiwan. Additional information is available at www.ocwen.com.