Plaintiff Jill Dempsey of Pennsylvania has brought a class action lawsuit against Ocwen Loan Servicing LLC alleging it failed to prove her mortgage payments were satisfied.
A mortgage satisfaction is a document created by a lender that acknowledges a borrower has paid off their mortgage loan in full. Ocwen frequently failed to timely file mortgage satisfactions. Sometimes waiting months or years after they were due, or not file at all.
Class Action Lawsuit Alleges Ocwen Mortgage Violated MSA and RESPA
Pennsylvania enacted the MSA to ensure lenders file mortgage satisfactions in a timely manner. Under the MSA, a mortgage servicer is required to file a satisfaction piece acknowledging the loan was paid in full within 60 days of the payment. If the satisfaction is not recorded on time, the consumer is meant to be protected from damage under RESPA.
Congress enacted RESPA to insure consumers are provided with better and more timely information on settlement processes and are protected from high settlement charges caused by abusive practices. If a borrower makes their mortgage loan payments on time and submits a written request that the loan servicer files a satisfaction piece, the servicer must acknowledge the receipt of the written request within 20 days.
The loan servicer provider must undertake an investigation and make any corrections by filing a satisfaction piece within 60 days of receipt of the written request and then notify the borrower it made such corrections.
On December 28, 2004, plaintiff Dempsey entered an “Open End Mortgage” agreement with GMAC Mortgage Corporation (GMAC) on her home. On February 16, 2013 she transferred her loan servicing to Ocwen. Dempsey received a welcome letter and a schedule of servicing fees to cover the costs of the county recorder’s office to record her mortgage satisfactions.
On July 9, 2013, Ocwen gave Dempsey a payoff quote of $14,031.75 valid through July 16, 2013 and included detailed instructions on how to pay off her loan. She followed the instructions and made two wire transfers on July 11th and 12th amounting to the total of $14, 031.75. On July 15th and 16th, Dempsey received emails from Ocwen confirming the receipt of funds and that there was a zero balance on her loan. Dempsey then made numerous requests that Ocwen record a satisfaction of its lien so she could refinance her home.
On July 13, 2013, Dempsey emailed Ocwen asking it to close her loan. She received authorization forms to close her loan which she filled out and mailed to Ocwen on August 5, 2013. She made a second request by email on August 15, 2013. Ocwen still failed to file a satisfaction piece.
On September 5, 2013, Dempsey made her third written request to close her loan by sending a letter via certified mail to Ocwen’s Home Equity Line of Credit Operations. She included copies of her previous emails and a check to cover filing fees in the county recorder’s office. A copy of the certified mail receipt confirms Ocwen received the letter on September 7, 2013.
In a letter from October 16, 2013, Ocwen informed Dempsey her loan was paid in full and closed. Ocwen then claimed it would take up to six months to file a satisfaction in her county’s recorder’s office. On March 21, 2014, 253 days after Dempsey paid her loan in full, Ocwen filed a satisfaction piece at the Chester County Recorder’s Office.
The lawsuit alleges that Ocwen failed to respond to Dempsey’s written requests and file a satisfaction piece in a timely manner. Dempsey has suffered economic harm and damages including being unable to refinance the mortgage on her home, having to pay a greater amount of interest, and the cost of the lawsuit.