Major mortgage bond investors including BlackRock, MetLife and Pimco on Friday took a first step toward suing Ocwen Financial Corp (OCN.N), accusing it of having failed to properly collect payments on $82 billion of home loans, according to documents seen by Reuters and a person familiar with the matter.
The group sent a formal notice of non-performance to Ocwen and trustees for 119 residential mortgage-backed securities trusts, alleging improper loan modification practices, wrongfully recouped advances, and a failure to account for cash flows.
The notice said that Ocwen also steered work to affiliates such as Altisource Portfolio Solutions (ASPS.O) and Home Loan Servicing Solutions (HLSS.O) for "unnecessary or overpriced servicing" to the detriment of the trusts, investors and borrowers.
The investors said the trusts had losses of more than $1 billion because of Ocwen's performance.
Margaret Popper, a spokeswoman for Ocwen, had no immediate comment.
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