WEST PALM BEACH, Fla. (Legal Newsline) – A mortgage company under fire for its loan practices has filed a motion to dismiss, alleging the Consumer Financial Protection Bureau (CFPB) has abused its authority in filing the suit.
"The entire complaint must be dismissed on constitutional grounds because the CFPB violates the system of checks and balances that protects Ocwen, and every citizen, from an unbridled government agency,” Ocwen's June 23 motion to dismiss states.
“The CFPB has no authority to bring this lawsuit,” it alleged.
The motion was filed in the West Palm Beach Division of the U.S. District Court for the Southern District of Florida. The CFPB is currently appealing a court ruling that says its structure is unconstitutional because its director, Richard Cordray, can't be removed without cause by the President.
In April of this year, the Florida Attorney General and the Florida Office of Financial Regulation Commissioner Drew J. Breakspear also filed suit against Ocwen Financial Corp. of West Palm Beach and its subsidiaries, Ocwen Loan Servicing LLC and Ocwen Mortgage Servicing Inc., alleging mortgage servicing misconduct.
According to the complaint, Ocwen improperly serviced its mortgage products, violating the Real Estate Settlement Procedures Act, the Florida Deceptive and Unfair Trade Practices Act and Chapter 494, Florida Statutes.
The CFPB, on its website, explained the alleged misdoings of Ocwen.
“The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes. Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Allegedly, Ocwen also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records,” the CFPB states.
It also alleges that “The CFPB uncovered substantial evidence that Ocwen has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.”
Ocwen defends itself in its motion to dismiss, arguing that in America "...citizens are protected against government overreach by the Founders’ carefully-crafted system of checks and balances. This also means that everyone gets fair notice of the requirements of any laws they must comply with before being sued or prosecuted, and that when the government tells citizens what to do it does not change the rules afterwards and then sue or prosecute."
Ocwen goes on to state in the motion that “the complaint is riddled with pleading deficiencies, due in part to the generalized nature of its claims of misconduct — this failing is all the more notable given that the CFPB prefaces the 14 Counts with 220 paragraphs of charged, accusatory allegations.”
There has been no ruling yet on the motion to dismiss.