Abuse of Power: The CFPB and Ocwen Financial Corp

Abstract

This paper discusses the treatment of Ocwen Financial Corp by the Consumer Financial Protection Bureau (CFPB) since 2012 and also examines the actions of private investors. The paper suggests that the CFPB has been overly harsh in its treatment of Ocwen, both measured by the amount of fines and penalties imposed and also because of the impressive record that the company has amassed in terms of helping consumers via loan modifications and permanent principal forgiveness. The author suggests that, judging by the record of fines and enforcement actions, OCN is seemingly being held to a far higher standard than any other legacy loan servicer in the U.S. The paper also suggests that the CFPB may be compromised by partisan political concerns due to the construction of the Dodd-Frank Wall Street Reform legislation, leaving the agency vulnerable to political manipulation and abuse of its extensive regulatory power.

Keywords: Altisource, Ocwen, CFPB, Cordray, Mortgage, Dodd-Frank, Regulation, ResCap, GMAC, Congress

JEL Classification: D7, D73, G2, G23, G3, G38, H1, H13, K2, K23, K4, K42, L5, L51, P4, P41, P48