Friday, February 20, 2015

Serving Up the Servicing Complaints

It's February 20th, and time to update our post from Feb. 20th last year, when we investigated state of the mortgage servicing arena.

Firstly the good news: overall, complaints for the year 2014 are down roughly 12% over 2013 levels.

Non-bank servicer Ocwen has been all the rage of late, and has risen to the most complained-about mortgage servicer out there in 2014.  Meanwhile many of the bank-servicers have decreased their servicing businesses and platforms -- often selling to non-bank servicers -- and with it their tally of complaints!

Notably, Ocwen has settled with the CFPB and related state AGs for alleged misdeeds between 2009 and 2012.  The settlement was to the tune of $2.1 bn, but much of this cost may well be absorbed by investors in RMBS trusts serviced by Ocwen.  Importantly, though, Ocwen's complaint count seems only to be rising, and is now roughly 70% higher than in was in 2012.

Also of interest, if you look in the list below at the five servicers whose complaints grew fastest between 2012 and 2013, all five of them continued to have complaint growth in 2014.  This unwelcome trends seems not to be abating.  For example, for Select Portfolio Servicing, Inc (SPS) complaints more than tripled from 2012 to 2013.  They're again up another 65% from 2013 to 2014.

For another take on this, see Tom Adams' interesting read in Naked Capitalism, entitled "Ocwen’s Servicing Meltdown Proves Failure of Obama’s Mortgage Settlements."

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