66 East Main Street, 3rd Floor Little Falls, NJ 07424

Ocwen Gets Relief from $3 Million Award; However, Records Were Incorrect

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Background: 

  • December 2009, Debtor filed for bankruptcy after foreclosure proceedings began on her home.
  • Chapter 13 Plan included mortgage arrearages payments through the Plan over 42 months
  • October 2011, Debtor received notice from Ocwen stated that Debtor owed $16,000.
  • April 2013, Ocwen stated Debtor had a $1,000 credit balance.
  • June 2013, Ocwen did not respond to notice that Debtor had made her last cure payment.
  • July  2013, Ocwen sent letter to Debtor indicating her “severely delinquent mortgage”; Ocwen later stated the letters were a mistake.
  • Ocwen still insisted payments were delinquent.
  • February 2015, Debtor sued Ocwen in Court for Breach of Contract and violations of the Fair Debt Collections Act, Consumer Fraud and Deceptive Business Practices.
  • 4 years after Debtor received her Discharge and 2nd day of jury trial, Ocwen found that the Debtor was current.
  • Jury awarded Ocwen to pay $582,00 in compensatory damages and $3 million in punitive damages for the pain, frustration and emotional torment Ocwen put Debtor through.
  • Ocwen appealed the punitive damages as excessive.

Court Ruling:

  • Ocwen’s conduct was reprehensible but not to an extreme degree.
  • Debtor suffered no physical injuries
  • Ocwen was indifferent to her rights including rights that originated from her bankruptcy.
  • Compared the award to maximum civil penalty of $50,000 under the statute and agreed that Ocwen’s conduct should not equal a penalty of 60x the maximum civil penalty.
  • Reduced the punitive damages award to $582,000 considering the mistreatment of Debtor’s $135,000 mortgage.

I have found that lenders have been wrong in the amount paid versus amount stated by the lender.

Many times, I had to demand a bank reconciliation and found that my client’s  payments were not properly recorded.   The lenders gave the matter a thorough review and corrected their records.

Lender’s records can be incorrect and I always deal with discrepancies immediately for my clients.