Last year, in June of 2019, Ocwen Mortgage Servicing transferred a friend’s loan to PHH.
Now, in the new year, he got two 1098 mortgage interest forms, and the Ocwen one appears to be wrong. However, Ocwen appears to be out of commission. The Ocwen customer login area is shut down and all the mortgage history that used to exist there is now gone.
Per Ocwen’s website: “On October 4, 2018, Ocwen Financial Corporation (“Ocwen”) acquired PHH Mortgage Corporation (“PHH Mortgage”), an established mortgage servicing company. PHH Mortgage is a wholly-owned subsidiary of Ocwen and continues to operate as PHH Mortgage. The combination of Ocwen and PHH Mortgage creates a strong non-bank mortgage servicer…” However, wholly owned or not, PHH doesn’t address my concerns about Ocwen’s accounting. Ocwen doesn’t either, since PHH is the new servicer.
Is the mistake huge? In his case, it’s a few hundred dollars. Is he the only one? Probably not. Search “class action and Ocwen”. My search showed more than $100M in Ocwen payouts for several lawsuits. There are also lots of fraud allegations, along with the statement by a law firm that “Unfortunately, we think that PHH rivals Ocwen in poor servicing practices” (https://www.mahanyertl.com/2019/ocwen-fraud-investigations/)
My big lesson: if you get the notification that servicing is being transferred, review your mortgage statements, payment history and principal balance carefully. In his case, he was paying $200 extra in principal a month and the accounting for that looks to be flawed. However, now it appears to be impossible to get this rectified. The new servicer takes no responsibility for errors that occurred prior to their assumption of servicing.
There are numerous class action suits against banks, specifically around the misapplication of principal prepayments for mortgages. I personally had problems with ABN AMRO and was cheated out of $900 in prepaid principal that the Dutch bank just refused to correct when they serviced on of my loans in the late 1990s.
Real estate is a phenomenal investment vehicle. Being careful with the parties to your investment is part and parcel of getting the highest possible returns. Keep going after your dreams, and you will reap the rewards.