John T. Grenie Charged With Indirect Criminal Contempt

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Case 08-02448-JHW Doc 1 Filed 10/16/08 Entered 10/16/08 11:03:22 Desc Main
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Steven N. Taieb, Esq.
Attorney at Law
BY /s/ Steven N. Taieb, Esq.
Steven N. Taieb,
1155 Rt. 73, Suite 11
Mt. Laurel, NJ 08054
(856) 235-4994
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW JERSEY
HONORABLE JUDITH H. WIZMUR
____________________________________________________________________________
In Re:
: CASE NO: 08-18700
JOHN KEMP
Plaintiff-Debtor(s)
: CHAPTER 13
: ADVERSARY NO:
Vs.
: COMPLAINT TO DETERMINE VALIDITY OF
COUNTRYWIDES LIEN AND TO EXPUNGE
: PROOF OF CLAIM
COUNTRYWIDE
:
____________________________________________________________________________
John Kemp, residing at 120 Chestnut St., Audubon, NJ states:
1. This complaint is a court proceeding pursuant to federal rule, Bankruptcy procedure
7001 and 28 USC section 157(b)(2)(A).
2. Venue of this complaint is proper in the district of New Jersey pursuant to 28 USC
1409(a).
3. On 6/10/08 Countrywide filed a claim for $211,202.41 with arrears of $4056.69. A
copy is attached hereto as Exhibit A.
4. Countrywide has failed to provide original loan documentation to show they are the
true mortgagee on 1316 Kings Highway, Haddon Heights, NJ 08035.
5. The property at 1315 Kings Highway, Haddon Heights, NJ was purchased on May 31,
2006 by the debtor.
6. Countrywide has failed to provide the original loan documentation to show that they
have a proper mortgage on said property pursuant to NJSA 46:9-9.
7. Without proper documentation Countrywides claim must be expunged since there is
no proof to establish its lien.
WHEREFORE, Plaintiff demands judgment:
A. Expunging Countrywides proof of claim and determining that Countrywide has
failed to establish a valid lien on 1316 Kings Highway, Haddon Heights, NJ.
B. Such other relief as is just and proper.
Dated: October 10, 2008
/s/ Steven N. Taieb, Esq.

STEVEN N. TAIEB
Attorney for Plaintiff
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IN THE UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW JERSEY
IN RE:
)
)
)
)
JOHN T. KEMP,
)
)
Debtor.
)
---------------------------------)
)
JOHN T. KEMP,
)
)
Plaintiff,
)
)
vs.
)
)
COUNTRYWIDE HOME LOANS, INC.,
)
)
Defendant.
)
)
---------------------------------)
Bankruptcy No. 08-18700
Adversary No. 08-02448
Camden, New Jersey

August 11, 2009
10:24 a.m.
TRANSCRIPT OF HEARING
BEFORE THE HONORABLE JUDITH H. WIZMUR
UNITED STATES BANKRUPTCY JUDGE
APPEARANCES:
For the Plaintiff:
BRUCE LEVITT, ESQUIRE

LEVITT & SLAFKES, PC
76 South Orange Avenue, Suite 305
South Orange, New Jersey, 07079
Cherry Hill, New Jersey 08003
For the Defendant:
HAROLD KAPLAN, ESQUIRE

FRENKEL, LAMBERT, WEISS, WEISMAN
& GORDON, LLP
80 Main Street, Suite 460
West Orange, New Jersey 07052
Audio Operator:
NORMA SADER
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Transcribed by:
DIANA DOMAN TRANSCRIBING SERVICES

P.O. Box 129
Gibbsboro, New Jersey 08026-0129
Phone:
(856) 435-7172
Fax:
(856) 435-7124
E-mail:
dianadoman@comcast.net
Proceedings recorded by electronic sound recording, transcript

produced by transcription service.
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LINDA DeMARTINI, DEFENSE WITNESS, SWORN
THE COURT:
Your full name,
first and last, and spell your last name, please.
4
5
Please have a seat.
THE WITNESS:
My name is Linda DeMartini.
The last
name is spelled D-E capital M-A-R-T-I-N-I.

DIRECT EXAMINATION
6
7
BY MR. KAPLAN:
Okay, Ms. DeMartini, would you -- who are you employed by?
I am employed by Bank of America Home Loans, formally
10
known as Countrywide Home Loans.
11
Okay.
12
A total of almost ten years.
13
And what is your position there?
14
I am an operational team leader for the Litigation
15
Management Department currently.
16
year.
17
18
mortgage loan?
19
Yes, I am.
20
Okay.
21
documents, whos presently the owner, holder, transferee of
22
the note?
23
24
New York, and we -- we are the servicer, Bank of America Home
25
Loan, Servicing, LP, formally known as Countrywide Home Loan
And how long have you been employed there?
Ive been there just about a
Are you familiar with the documents relating to Mr. Kemps
Now who, based upon your knowledge of the loan
Well, the owner as in the investor, that would be Bank of
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DeMartini - Cross
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Servicing, LP.
Okay.
3
4
MR. KAPLAN:
Id like this marked as I guess D-1.
Okay, may I approach the witness, Your Honor?
THE COURT:
Yes.
BY MR. KAPLAN:
Could you tell the Court what that document is?
Thats the allonge to the promissory note.
And is that the original?
10
Yes, this is.
11
And it references -- what -- could you -- and who signed
12
that document?
13
Sharon Mason.
14
And whats Ms. Masons position with Country --
15
She is Vice President.
16
Bankruptcy Risk Litigation Management Department.
17
actually my bosss boss.
18
Okay.
19
Yes, I know it very well.
20
And thats Ms. Masons signature?
21
Definitely.
22
And the allonge is -- the purpose of the allonge?
23
It shows the transfer to Bank of New York as the trustee.
24
Okay.
25
is trustee as the holder or the investor of that loan?
Shes actually part of our

Shes
And youre familiar with Ms. Masons signature?
So it -- its your testimony that Bank of New York
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Yes, thats correct.
MR. KAPLAN:
Your Honor, essentially she has
testified to the document.
questions that --
THE COURT:
I really dont have any other
Well, lets cross.

CROSS-EXAMINATION
6
7
BY MR. LEVITT:
documents?
Ms. DeMartini, you said youre familiar with the loan
10
Hm-hmm.
11
What do they consist of?
12
Well, weve got the notice there, the mortgage is there.
13
In our system we have any of the documents -- settlement
14
statement, title policy, every single document that would have
15
been signed at the time that the loan was taken out.
16
When was the first time that you saw those documents?
17
A few weeks ago.
18
Were you at all involved in the preparation of the proof
19
of claim?
20
21
have been before it got to the Litigation Department.
22
23
promissory note?
24
Approximately two weeks ago.
25
And how was it that you came to see the allonge to the
No, I was not involved in the proof of claim.
That would
When was the first time that you saw the allonge to the
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DeMartini - Cross
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promissory note?
litigation specialists who work for me.
up, I review their cases as a regular matter of course so Id
be reviewing the documents with that.
as far as having this hearing today and it became known to me
that I was most likely going to be the one traveling here to
be a part of it, I made sure that I got involved in every
aspect of the case.
Well, in my role as a supervisor in the department I have

When cases are coming
When this date came up
10
When was this allonge prepared?
11
This allonge would have been prepared by my specialists.
12
I dont have the exact date committed to memory, but this
13
would have been done within the last couple of months most
14
likely.
15
So one of your employees prepared the allonge?
16
One of my employees would have taken -- would have gotten
17
the allonge and we would have been the ones that obtained the
18
signature from Sharon, yes.
19
So it was just recently signed?
20
Fairly recently signed, yes.
21
Signed essentially in contemplation or in the course of
22
this litigation, correct?
23
Most likely.
24
And it was prepared in your office?
25
It would have been -- whether it was originally prepared
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DeMartini - Cross
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in my office or not I cant answer to that.
I can tell you it
was signed in our office because Sharons the one that signed
it --
So the original --
-- and Ive been to her office.
-- the original was located in your office?
Yes.
Wheres your office located?
Simi Valley, California.
10
And has the original of this allonge remained in your
11
office until you appeared here today?
12
13
possession of it.
14
15
and mortgage here?
16
17
calling ourselves these days, we are Bank of America now -- we
18
originated this loan.
19
really always been a Countrywide loan.
20
of New York.
21
22
it sold?
23
sold to this trust?
24
25
the investors of the loan.
We had sent it on to -- to our attorneys.
They were in
And again, who do you believe is the holder of the note
Well, Countrywide -- Bank of America -- whatever were
It was originated via a broker and its

The investor is Bank
We are the servicer of the loan.
Now, when you say its really a Countrywide loan, wasnt

Wasnt this loan securitized and ultimately sold --
Right, it would have been securitized and sold.
They are
But we are the ones that would
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have originated it, we are the ones that have always serviced
it.
Today who is the owner of the loan?
Bank of New York.
Bank of New York?
As -- as the trustee for the certificate holder CWABS,
Asset-Backed Securities series number --
And who is in possession of the note?
Who is in possession of the note?
We have the note in our
10
origination file.
11
12
note, is that correct, or is not in possession of the note?
13
14
file.
15
Where is the -- do you have it here today?
16
No, I dont have it with me here today.
17
So you dont have the note?
18
Its in our office.
19
So its in your office, its not with this trust that owns
20
the -- thats supposedly holds the -- or is the owner of this
21
note, is that correct?
22
Thats correct.
23
And your testimony is that this allonge was never
24
submitted to -- it was never in the possession of Bank of New
25
York as trustee for the certificate holder, is that correct?
So -- so Bank of New York as trustee does not hold the
The original note to my knowledge is in the origination
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MR. KAPLAN:
Bank of America is the servicer.
the documents.
THE COURT:
Your Honor, I object.
Countrywide or
They possess and hold all
Dont give me an argument, thats not an
objection to the question.
I dont mean to be -- to cut your
off, but youre welcome to make that argument bottom line, but
thats a perfectly proper question.
BY MR. LEVITT:
And this allonge, its a stand-alone document, correct?
10
Its not attached to anything, is that correct?
11
Im not sure Im understanding your question.
12
Was there anything -- when you brought the original thats
13
in front of you, did you remove it?
14
something else?
15
16
else.
17
the -- you know, we would have shown her the note.
18
have reviewed all of that before.
19
And where are all the documents that you showed her?
20
Well, I have copies of -- I have a copy of the note, I
21
have a copy of the deed with me here today.
22
And those --
23
Theyre signed copies.
24
Can you show me exactly the documents that you showed her
25
when you had her sign this allonge?
Was it stapled to
No, it wouldnt have necessarily been stapled to something

There would have probably been other documents showing
We would
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DeMartini - Cross
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Theyre probably right -- well, they would be in that
clump there.
Agreement, the larger one.
This one?
Yeah.
mortgage and you sign it.
Thats mostly the Pooling and Servicing
Theres the note in there, theres the deed and the
You just --
MR. KAPLAN:
May I provide this --
MR. LEVITT:
-- Im sorry.
10
MR. KAPLAN:
-- provide this note?
11
MR. LEVITT:
Yeah, go ahead.
12
THE WITNESS:
Because this was provided to me by my
13
specialist to -- to bring along so that I have the documents
14
here for you today.
15
BY MR. LEVITT:
16
17
is it Sharon Mason?
18
19
-- and to be honest with you, I dont know if it was me or my
20
specialist, Dee, who brought them to her -- whoever brought
21
them to her would have had them with them, yes, whichever of
22
the two of us.
23
Who brought them to her?
24
Generally speaking, it would have been me, but I dont
25
recall bringing this particular one to her so I believe it was
Let me ask you this.
Did you show those documents to --
Did I personally show the documents?
Whoever brought her
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Dee.
you dont know what documents were shown to her, is that
correct?
theyre right here and they -- and theyre all together.
personally?
Not to my knowledge, no.
10
Do you know specifically who brought those documents to
11
Ms. Mason?
12
My specialist, Dee.
13
And you saw her bring the documents to Ms. Mason?
14
Did I physically stand over her --
15
Yes.
16
-- and witness it?
17
Okay.
18
An imaged copy of the signed note is in here.
19
Is --
20
The absolute original, no, it is not.
21
And again, my question before was was this attached to the
22
note?
23
staple, with a piece of glue -- was it attached?
24
25
it.
So you dont recall bringing it, you dont recall -- and
No, I know what documents were shown to her because
Did you bring those documents to Sharon Mason?
Did you
No.
Is the original note in that stack of documents?
This allonge, was it attached physically, with a
With a staple?
No, because then it would have a hole in
But it would have been brought along with it.
We would
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DeMartini - Cross
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have shown it to her.
this is a stand-alone document, it wasnt attached to
anything?
Okay, then yes.
Okay.
to be the good copy of the note that you have?
Okay.
Do you mind separating it from the rest of the papers?
10
Sure, Ill take it apart.
But again, now again getting back to my other question, so
11
12
And can you take a look at the -- what you believe
(Pause in proceedings)
A
Okay, and your question?
13
MR. LEVITT:
14
THE COURT:
Your Honor, may I approach the witness?

Sure.
15
BY MR. LEVITT:
16
Not the mortgage, the note --
17
Yeah, Ive got all kinds of stuff.
18
MR. LEVITT:
Your Honor, if you could excuse us one
19
second.
There seems to be a discrepancy between what the
20
witness has and what my office was provided.
21
THE COURT:
Certainly.
22
MR. KAPLAN:
Judge --
23
THE COURT:
And while you look at that, let me see
24
whats going on with the other case.
25
few minutes.
Youre welcome to take a
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(The Court hears another matter)
MR. LEVITT:
Your Honor, with counsels permission,
since we have stipulated, Id like to provide a copy to Your
Honor.
5
6
THE COURT:
All right.
Is this a copy that we can
mark?
MR. LEVITT:
Its an exact copy and we can mark that
as joint Exhibit 1, I believe.
THE COURT:
J-1, interest only adjustable rate note.
10
BY MR. LEVITT:
11
12
file?
13
Yes.
14
And theres no endorsement on the last page of that note,
15
is there?
16
No --
17
Theres --
18
-- theres no signature.
19
Is there room on the bottom if somebody wanted to put Pay
20
To The Order Of?
21
Well, Im sure you could find a way to fit it in.
22
Okay.
23
Now, that document is the note that was contained in your
Would there be room on the bottom?
MR. LEVITT:
24
witness, Your Honor.
25
THE COURT:
I have no further questions of this
All right.
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MR. KAPLAN:
THE COURT:
Cross-examine, Your Honor?

Please, please.
REDIRECT EXAMINATION
3
4
BY MR. KAPLAN:
investor to hold the documents?
No.
And are documents ever transferred to the investor?
If we service-release them they would be transferred to
Ms. DeMartini, is it generally the custom to -- for your
They would stay with us as the servicer.
10
whomever were service-releasing them to.
11
12
of this loan?
13
Yes.
14
So Countrywide had possession of the documents from the
15
outset?
16
Yes.
17
And subsequently did Countrywide transfer these documents
18
by assignment or an allonge?
19
Yes.
20
And --
21
Well, transferred the rights, yes, transferred the
22
ownership, not the physical documents.
23
24
corporate entity Countrywide or Bank of America?
25
So I believe you testified Countrywide was the originator
So the physical documents were retained within the
Correct.
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DeMartini - Recross
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Okay.
procedure in the mortgage banking business?
as the reason that we are the servicer, as were the ones that
are doing all the servicing, and that would include retaining
the documents.
-- was endorsed at the bottom.
to endorse the actual note or to use an allonge?
Yes.
And would you say that this is standard operating
It would be normal -- the normal course of business
Now, you were asked about whether or not the note could be
Is it generally the practice
10
Its -- Ive never seen an actual note that has an
11
endorsement on the bottom.
12
So would you say its normal --
13
Its generally more --
14
-- to have an allonge?
15
Yeah, it would be more normal to have an allonge.
16
Okay.
17
generally happen to the allonge?
18
19
it would be put in our system and it would be kept as a normal
20
course.
21
attorneys because of the case but --
22
23
what would have happened to the allonge?
24
It would have ended up in the file with everything else.
25
And the note attached to it?
And once the allonge was signed, what would
Well, it would also be imaged and it would be recorded and
In a situation like this, we forwarded it onto the
Okay.
And if it had not been forwarded to the attorneys,
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Yes.
Thank you.
3
4
MR. KAPLAN:
I have no further questions, Your
MR. LEVITT:
Just briefly, Your Honor.
Honor.
RECROSS-EXAMINATION
6
7
BY MR. LEVITT:
prepared a couple of weeks ago, correct?
Ms. DeMartini, you testified that this allonge was just
10
Yeah, a short time ago, yes.
11
And wasnt it prepared because counsel called up and said
12
we need and allonge?
13
Yes.
14
So it wasnt your normal course to have an allonge in this
15
situation, correct?
16
Well --
17
When was this loan made?
18
This loan was taken out I believe in 2006 -- yes.
19
So between 2006 and 2009 when you got a phone call from
20
counsel that said weve got a problem, prepare an allonge,
21
there was no allonge, correct?
22
23
like I said, it was always -- this was a loan that we
24
originated that has always been within the company that yes,
25
it was sold to -- as Bank of New York as the trustee and
There wasnt an allonge prior to that, no.
This loan,
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securitized, but there wasnt a need for an allonge prior to
this case.
Because there was no litigation pending, correct?
Well, because there was no litigation --
Thank you.
-- and because there was nothing to -- to get in the way
of the fact of the normal course of -- of the way that this
loans being executed and being --
Thats fine.
10
-- being serviced.
11
Thank you.
12
MR. LEVITT:
Thats it, Your Honor.
13
MR. KAPLAN:
One more question, Your Honor.

REDIRECT EXAMINATION
14
15
BY MR. KAPLAN:
16
17
rights in the mortgage and the note to Bank of -- to Bank of
18
New York as trustee?
19
20
Was it the intention of Countrywide to assign both its
Yes.
THE COURT:
Say that again?
21
BY MR. KAPLAN:
22
23
in both the note and the mortgage to Bank of New York?
24
25
Was it the intention of Countrywide to assign its rights
MR. LEVITT:
Your Honor.
Im going to object to the question,
Im not sure this witness is competent to answer
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DeMartini - By the Court

1
that question based upon the foundation laid.
THE COURT:
MR. KAPLAN:
I agree.
Well, Your Honor, they -- to the extent
that there wasnt a physical document at some -- at the time,
they remediated that by signing the allonge and facilitating
their intentions.
THE COURT:
Well, thats certainly a valid argument,
but its not -- it still doesnt answer the question of
whether Ms. DeMartini can speak for Countrywide in terms of
10
their intent in doing anything.
11
MR. KAPLAN:
Well, its evidence that it was their
12
intent to assign the mortgage.
13
THE COURT:
14
It very well may be, and well leave it
at that.
15
MR. KAPLAN:
16
THE COURT:
17
couple of questions.
Okay.
Objection sustained.
18
Let me ask you a
EXAMINATION
19
BY THE COURT:
20
21
Lender that was filed with the proof of claim.
22
your file as well, that --
23
Yeah.
24
And it is unsigned?
25
The old one?
There was an unexecuted allonge to Americas Wholesale

Is that in
I have the -- the unsigned copy in there.
Yeah, thats the -- the copy I have, it
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19

1
looks like its unsigned, yeah.
allonges in the normal course?
in there.
Department is the one that would be the ones actually
preparing and filing the proof of claim.
involved when things turn to litigated matters --
But Im not --
10
-- and so thats why I cant speak to what they do in
11
their -- in their normal course of action.
12
unsigned one before.
13
14
of claim.
15
of Countrywide when a loan is transferred, when ownership is
16
transferred, when in this case the mortgage assignment
17
occurred on March 24th, 2008, correct?
18
Yes.
19
And would that have been the date that the ownership of
20
the note and mortgage were sought to be transferred to Bank of
21
New York as trustee?
22
That would have been the day they got the ownership, yes.
23
So the question is whether you know whether its normal
24
practice for Countrywide to execute an allonge at the time
25
that that transfer takes place.
So is it the normal practice of Countrywide not to sign
I cant answer to why that one was unsigned and that was
When a loan goes into bankruptcy, our Bankruptcy
Our group gets
I havent seen an
Well, Im not talking about the process of filing a proof

Im talking about the customary business practice
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20

1
I dont believe that theyre always executed exactly when
the transfer takes place.
happens that it happens after the fact.
And does it always happen?
I can speak that it always happens, no.
So theres no routine that requires internally, to your
knowledge, that the allonge be executed in connection with the
transfer of ownership?
I believe that it often times
No, I dont think that there is a norm in that respect
10
because in a normal course of action and for -- and normal is
11
kind of a hard word anyway -- but --
12
A normal business practice, an ordinary --
13
-- but as a normal business practice with a normal loan,
14
often times there really isnt a need for it unless the loan
15
is going to continually to be sold, and since this loan was --
16
yes, it was transferred to Bank of New York as trustee as it
17
was securitized, but it wasnt that another mortgage company
18
had the loan and then we bought it from them.
19
mentioned, this was always done by Countrywide and we
20
securitized it and we -- you know, we sold it to them --
21
This was done --
22
-- and so --
23
-- Im not asking whether it was necessary, I am asking
24
whether there was an ordinary business practice to sign an
25
allonge and the answer is no, there was not?
Like I
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21

1
I dont believe so.
Countrywide, the same entity as the originator of the
loan, serviced the loan from the outset or was it a different
aspect of the company?
of America has taken over Countrywide so to speak and we are
now wholly owned by Bank of America, all of the Countrywide
loans are still being serviced and the Bank of America --
prior Bank of America loans, theyre all still being serviced
No.
It would have always been the same.
Even though Bank
10
and done separately.
11
12
loan was given on May 31st, 2006, correct?
13
Yes.
14
And when the loan was given, after the loan was given,
15
Countrywide Home Loans, Inc. retained the servicing on the --
16
Yes, thats correct.
17
And as of March 24th, 2008, that continued to be the case,
18
is that right?
19
Thats correct.
20
And there was a Pooling and Servicing Agreement between
21
Countrywide and --
22
Bank of New York.
23
-- Bank of New York --
24
Yes.
25
-- regarding the continued servicing of the loan, is that
Okay.
This has always been by Countrywide.
Putting aside the takeover by Bank of America, this
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Levitt - Argument
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right?
Thats correct.
And to your knowledge -- I think you might have the
servicing arrangement --
Yes, I brought a copy of it.
-- with you, to your knowledge, is there any provision
that in the servicing of this loan that Countrywide acts as
the agent for Bank of New York in terms of possession of
original documents including the note in connection with this
10
transaction?
11
12
over 200 pages long.
13
entire Pooling and Servicing Agreement.
14
our normal course of action with the loans that we service
15
that we are the ones that retain the -- that we retain those
16
documents.
17
18
such a clause, would that -- what would be the effect of that?
19
Should I look for that clause?
20
that clause, or is it a fruitless enterprise?
21
I have the Pooling and Servicing Agreement there.
Its
Ill be very honest; I did not read the

I do know that it is
Could such a clause be included in that, and if there were
MR. LEVITT:
Should I ask you to look for
Your Honor, I think -- and I have it
22
also and it is a very thick document, Your Honor -- there are
23
other provisions in this document that I think would be --
24
even if there was something in there that says they could
25
retain documents, theres other provisions in this document
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which would be contradictory because theres provisions in the
Pooling and Servicing Agreement that say that documents have
to be delivered to an intermediary between Bank of America and
Bank of New York, the --
THE COURT:
Well, shouldnt I consider all of that?
In other words, your -- one of your key points is the note was
not properly transferred because possession of the original
note was not given to the new owner, is that right?
MR. LEVITT:
10
THE COURT:
11
MR. LEVITT:
12
THE COURT:
13
MR. LEVITT:
14
THE COURT:
15
MR. LEVITT:
Partially, Your Honor.

Okay.
But again, Im not -Whats the --- but Im not raising -What part of it is --- but Im not -- Im not defending
16
this.
The proofs that have been submitted to the Court are
17
that theres a piece of paper that theyre calling an allonge
18
that was prepared in the course of this litigation that
19
theyre relying on as an endorsement.
20
THE COURT:
Youre right.
21
MR. LEVITT:
I havent --
22
THE COURT:
23
MR. LEVITT:
24
THE COURT:
25
Youre right, but -But I havent heard --- Im asking the question, and maybe it
should have been asked otherwise, but if there is such a
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provision in the servicing agreement about the retention of
possession as agent for the owner --
MR. LEVITT:
THE COURT:
And if -- if --- what part of your argument is it?
In
other words, you say possession of the document is part of the
argument.
What else is a part of the argument?

MR. LEVITT:
No, but possession -- you have to have
possession of the document but in addition to possession, you
either have to have an endorsement, or you have to have proof
10
that these documents were actually transferred to the ultimate
11
owner, even if the agent for the owner is holding them.
12
there still has to be proof that it was delivered from A to B
13
to C but none of those proofs have been submitted and its not
14
my burden, Your Honor.
15
But
If counsel wants to say all right, forget the holder
16
argument, I lost on holder but heres my case that this note
17
was transferred from A to B to C, heres the delivery receipts
18
and yeah, it may be sitting in somebodys vault in California
19
and not with this trust, fine.
20
proofs and I dont think the Pooling and Servicing Agreement
21
gives us that, Your Honor.
22
receipts, we need to show the chain and theres nothing before
23
the Court.
24
25
THE COURT:
But I havent heard those
We need to see the delivery
Understood.
Mr. Kaplan, is there
anything in those documents in the Pooling and Servicing
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2
3
contract that would -MR. KAPLAN:
Thats a good question, Your Honor,
but, you know --
THE COURT:
MR. KAPLAN:
Dont you think you --- and I believe the witnesss
experience is that documents are not physically transferred
from party to party to party.
8
9
THE COURT:
But its not experience that were
talking about, its UCC requirements.
10
MR. KAPLAN:
11
THE COURT:
I understand.
Is Mr. Levitt right when he says that
12
some kind of delivery of possession is required in order to
13
qualify as a transferee, not a holder?
14
well established that the affixing that is required for holder
15
in due course status as not apparent in this case, has not
16
been established, but if you establish under UCC requirements
17
that there is a proper transfer, there may still be
18
opportunity to enforce the obligation.
19
MR. KAPLAN:
Right.
I think weve pretty
Your Honor, I understand but, I
20
mean, theres no way Im going to argue that there was a
21
physical transfer.
22
originator.
Countrywide was the servicer, the
They had the documents --
23
THE COURT:
24
MR. KAPLAN:
25
Right, there was no --- they physically signed the necessary
documents required to document their ownership interests being
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Kaplan - Argument
1
transferred to the trust --
2
3
THE COURT:
In other words,
Im --
4
5
Thats the issue.
MR. KAPLAN:
-- but they didnt physically deliver
THE COURT:
-- Im raising the possibility that the
it.
Pooling and Servicing Agreement might contain provisions that
would serve to offer Countrywide an out, meaning Im not --
you know, here to advocate Countrywides cause, but I am here
10
11
to get to the -- as close as I can to what should happen here.

MR. LEVITT:
Your Honor, Ill answer the question
12
because I did see in the index -- and if Your Honor would like
13
I can hand up the Pooling and Servicing Agreement.
14
the Pooling and Servicing Agreement that was provided by the
15
defendant and Ill call your attention to Section 8-13.
16
THE COURT:
17
MR. KAPLAN:
What page is he on?
18
MR. LEVITT:
Its 150.
19
THE COURT:
This is
Thank you.
8.13, Access to records of the trustee.
20
The trustee shall afford the sellers, the depositor, the
21
master servicer, the NIM Insurer and each certificate owner
22
upon reasonable notice during normal business hours access to
23
all records maintained by the trustee --
24
25
MR. LEVITT:
records, Your Honor.
That tells me the trustee has the

Thats as close as I can get.
But Ill
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1
let you finish.
THE COURT:
Well, yes, that doesnt seem to get at
it.
to act as the agent for the trustee in maintaining the
original documents, then we face squarely the question of
whether lack of possession by the owner, the retention of
possession by the servicer, violates the transferee status of
the owner, or whether the servicer who filed the proof of
claim can stand by that status to succeed against this
10
If there is no authority in this document for Countrywide
challenge.
11
MR. KAPLAN:
Well, Your Honor, the servicer has
12
authority to act in servicing the loan, including filing a
13
proof of claim under the Pooling and Servicing Agreement.
14
addition, I believe theres a power or attorney that Bank of
15
New York has provided to Countrywide to act on their behalf to
16
administer --
17
THE COURT:
18
MR. KAPLAN:
19
Honor.
20
21
In
Well, where is that?

Id be happy to provide that to Your
Okay, we can mark that as Defendants Exhibit 2.

THE COURT:
Did we mark this copy of the servicing
agreement as Defendants Exhibit 3?
22
MR. KAPLAN:
23
THE COURT:
Thats fine, Your Honor.

And did we allow you a chance to look at
24
this document to ascertain what in it might be helpful to
25
you --
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MR. KAPLAN:
THE COURT:
Your Honor, theres --- rather than just leaving it to me to
peruse?
MR. KAPLAN:
Well, thats fine, Your Honor, well be
happy to go through and submit to Your Honor references to the
various provisions in the document.
THE COURT:
Okay, lets take a look, D-2, power of
attorney signed by the trustee.
Servicing Agreements -- constituting and appointing
Under the Pooling and
10
Countrywide Home Loan Servicing, LP full power of substitution
11
and re-substitution for the limited purpose of executing and
12
recording any and all documents necessary to effect a
13
foreclosure of a mortgage loan, the disposition of an REO
14
property, an assumption agreement or modification agreement to
15
supplement -- or supplement to the mortgage note, mortgage or
16
deed of trust and a reconveyance, deed of reconveyance or
17
release or satisfaction of mortgage or such instrument
18
releasing the lien of a mortgage in connection with the
19
transactions contemplated in those certain Pooling and
20
Servicing Agreements, by and among the undersigned, et
21
cetera.
22
The undersigned also grants -- full power and
23
authority to do and perform each and every act and thing
24
requisite and necessary to be done in and about the premises
25
as fully to all intents and purposes as might or could be done
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1
in person to effect items one, two and three above, hereby
ratifying and confirming all that said attorneys in fact and
agents or any of them or their substitutes may lawfully do or
cause to be done by virtue hereof.
Well, theres a question mark -- does this power of
attorney authorize the agent/servicer to hold the original
documents in substitution for and satisfaction of the
requirements of the UCC.
MR. KAPLAN:
I mean, thats a question mark.
I understand.
I understand, Your
10
Honor.
But, I mean, Your Honors probably familiar, mortgage
11
lenders and servicers dont normally transfer documents back
12
and forth in order to effectuate physical transfer.
13
utilize agents or servicers to execute documents and retain
14
the documents and they dont send them across the country by
15
messengers or Federal Express to go to different vaults to be
16
maintained because --
17
THE COURT:
18
MR. KAPLAN:
19
THE COURT:
20
And thats fine.
Thats --
And thats standard -I mean, Im not accepting your testimony
as an expert --
21
MR. KAPLAN:
22
THE COURT:
23
MR. KAPLAN:
24
THE COURT:
25
They
well be reasonable.
Yeah, I know, I know.

-- to that effect -But I think its reasonable --- but Im accepting it and it may very
Is it permissible under the Code.
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MR. KAPLAN:
I understand, okay.
THE COURT:
Thats all Im asking.
MR. KAPLAN:
All Im saying is I believe that its a
standard business practice amongst the mortgage banking
industry and servicing industry not to physically move
documents from party to party unless there is a change of
servicing, in which case the physical files then must be sent
to the new servicer, not necessarily the new investor, holder
or -- you know, recorded owner of an assignment of mortgage,
10
et cetera, but the new servicer.
11
THE COURT:
Well, it certainly makes sense and
12
presumably the Pooling and Servicing Agreement will clarify
13
that there is agency status for that purpose and we would try
14
to understand whether that would be sufficient for UCC
15
purposes.
16
talking first about possession.
17
about?
18
take it that the allonge that weve looked at, the new
19
allonge, has not been recorded?
20
MR. KAPLAN:
What else should I be looking at, counsel?
What else are we talking
All right, let me ask one question before I forget.
21
note, Your Honor.
22
like a check -THE COURT:
24
MR. KAPLAN:
Well, normally you would not record a
The note passes from party to party.
23
25
Were
Its
Right.
-- it doesnt get recorded in the
County Clerks Office generally --
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THE COURT:
MR. KAPLAN:
Thats fine.
-- so it would normally be placed in
original -- with all the original documents and essentially
attached to the note.
5
6
THE COURT:
Understood.
Okay, what else should I be
looking at?
MR. LEVITT:
Your Honor, if Your Honor does want to
focus on the Pooling and Servicing Agreement, there are other
provisions in the Pooling and Servicing Agreement that Your
10
Honor might want to look at, specifically -- and if I could
11
just grab my copy --
12
THE COURT:
13
MR. LEVITT:
Of course.
Is this your copy?
Yes, it is.
Actually, I have -- I have
14
excerpts -- copies of excerpts, Your Honor, and Ill --
15
actually Ill hand up the original to you so --
16
MR. KAPLAN:
I would also argue, Your Honor, in that
17
-- as I said, I believe its standard operating procedure for
18
servicers, especially when they were the originator of the
19
documents and when they sell them or securitize them and
20
remain the servicer, to execute the documents that are
21
required for transfer, but that theres not a physical
22
transfer.
23
24
25
And if youre going to determine -THE COURT:
Mr. Kaplan, youre testifying about the
ordinary -MR. KAPLAN:
My witness I think can testify to that
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but I think --
THE COURT:
Well, youre welcome to have --
MR. KAPLAN:
-- I think Your Honor can --
THE COURT:
MR. LEVITT:
She has.
MR. KAPLAN:
-- I think Your Honors experience can
-- her testify.
reasonably allow you to take judicial notice that documents
dont go from party to party, that they remain with the
servicer.
10
MR. LEVITT:
11
THE COURT:
12
I dont -- I dont think the -Im not going to take judicial notice of
that.
13
I noticed that this particular copy is unsigned.
14
you know when the Pooling and Servicing Agreement would have
15
been signed?
16
THE WITNESS:
We went to get a signed copy the other
17
day and we were told that it is not customary for us to have
18
the signed document so I wasnt able to access the signed
19
document.
We have the copy --
20
THE COURT:
21
THE WITNESS:
But --- but we dont have the signed
22
original.
23
document I dont have the original -- access to the original
24
of.
25
Do
I dont have the signed of that.
MR. LEVITT:
Thats the one
Your Honor, again, Im not in any way,
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shape or form testifying but I can advise the Court that I
spent many hours trying to find this Pooling and Servicing
Agreement on the SEC website where they have to be filed and I
could not find it, so the only copy of the Pooling and
Servicing Agreement that I have is this unsigned copy provided
by counsel for the defendant which I have to accept as a valid
document.
8
9
But I can tell Your Honor, the SEC website is where

-- where you can find them; I cant find it.
I can find a lot
10
of others in a similar name but with different numbers.
11
cant find this one.
12
THE COURT:
13
Is there reference in this document that
I have in my hand to this particular mortgage?
14
THE WITNESS:
15
THE COURT:
16
THE WITNESS:
17
THE COURT:
18
I dont have it in front of me.
There are all kinds of exhibits -Its --
-- that have numbers but dont have
substance.
19
(Pause in proceedings)
20
THE COURT:
21
MR. LEVITT:
22
THE COURT:
23
24
25
Have you looked at that, counsel?

Excuse me, Your Honor?
Have you looked at whether there is
reference to this particular mortgage?

MR. LEVITT:
No, Your Honor.
Your Honor, it wasnt
again my experience -- because Ive been reading a lot of
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these lately -- my experience is theres a schedule thats
annexed.
schedule in the filing with SEC I guess for privacy purposes
and youre directed to whichever law firm is the firm that
filed the documents with the SEC, but I wasnt even provided
the schedule as part of this submission.
Very often Im finding that they dont include the
And again, I went onto the SEC website looking for
it and couldnt find it.
I will also point out to Your Honor
that the copy that I was provided and the copy thats in front
10
of Your Honor on the first page references a draft.
11
Sidley -- I guess Sidley and Austin was the law firm, it was
12
their draft dated 06/27/06.
13
this is labeled draft, this may not be the operative document
14
but it is the only document that I was provided by the
15
defendant.
16
MR. KAPLAN:
It says
I dont believe, again because
I understand, Your Honor, and I wasnt
17
involved in transmitting the document but I am aware that it
18
does say that.
19
20
21
22
THE COURT:
Well, I think you need to get involved
MR. KAPLAN:
I did -- I did ask specifically for a
and --
document that was signed and essentially was final.
23
THE COURT:
24
MR. KAPLAN:
25
Essentially?
Well, it was a final document --
signed, final document, not as alleged, a draft.
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THE COURT:
And you didnt get it?
MR. KAPLAN:
And I have not, no.
THE COURT:
So we dont know what this is, nor do we
know whether it applies to this particular situation.
only clue we have is that its between Countrywide and the
Bank of New York trustee and that it relates to Asset-Backed
Certificate Series 2006/8 --
MR. KAPLAN:
THE COURT:
The
Right.
-- which suggests that it might be the
10
same pool, but we dont know whether it was executed.
11
questions raised because its not on the SEC website and we
12
dont have a specific listing of this particular mortgage, and
13
I take it that additional time will not help you?
14
15
MR. KAPLAN:
We have
Well, I dont have physical access.
It
would be up to Countrywide or Bank of America --
16
THE COURT:
17
MR. KAPLAN:
Well, you as counsel for Countrywide -Well, Your Honor, I would certainly
18
request additional time to allow Countrywide, the defendant,
19
to procure the documents, provide them to counsel and Your
20
Honor, as well as for us to synopsize the information
21
contained in there pertaining to possession and retention of
22
documents.
23
THE COURT:
Well, you know, this is a serious
24
consequence -- this meaning the relief sought by the
25
plaintiff.
If there are substantial gaps in my ability to
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follow the stream, then the plaintiff will be successful.
would offer that opportunity to Countrywide.
If they cant come up with a signed legitimate
verified copy of it -- and it can be in the first instance the
final executed document with some tie-in to this mortgage --
somebody has an exhibit that would, you know, list this
mortgage theoretically -- and if they dont, thats a problem
-- with a certification from a qualified Countrywide
representative that this is what it purports to be.
10
If there are further questions, we can take further
11
testimony, either in Court or by telephone conference call.
12
hate to make you come back from California, although -- and
13
its not very nice this time of year in New Jersey, I will
14
grant you that, but we can, you know, try to keep going in
15
terms of getting it.
16
There is a limit and there is a burden, I fully
17
agree with you, counsel.
Im pushing the envelope to see
18
where we get to in terms of lining these things up or not.
19
Thats what Im aiming for because I frankly dont want to
20
grant relief if there is something for instance in these
21
documents and if the final draft has been executed and so
22
forth that should guide resolution of this decision.
23
major implications potentially.
24
decision may be ignored but it may be a basis for other such
25
relief and Id like to get it right if I can so --
It has
I mean, you know, my written
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MR. KAPLAN:
I share that thought, Your Honor.
was going to mention, it does have significant ramifications
because of what -- you know, the document and the physical
retention of documents or physical transfer of the documents
might mean to other -- you know, loans.
THE COURT:
Then I urge Countrywide to take it
seriously and to direct their attention to -- meaning if there
are things that they want under seal for any reason, thats
certainly something that we would accommodate in the first
10
instance subject to objection so there is opportunity to work
11
with them on this, but theyve got to come to the table, and I
12
think thats demonstrated by this hearing.
13
So if -- if there can be a -- if youre right,
14
counsel, number one that possession is required but if that
15
possession is demonstrated by agency, one might disagree about
16
whether possession can be demonstrated by agency.
17
thats another question that is posed, even if the documents
18
do support that.
19
that hurdle.
20
21
22
Perhaps
But lets assume that Countrywide gets over
What else would we look at -- should be look at?
MR. LEVITT:
Again, Your Honor, the lack of
endorsement, the fact that theres no allonge affixed so -THE COURT:
Well, affixing of the allonge weve sort
23
of -- were done with.
Were -- this is not going to be a
24
holder in due course but Im not sure that it matters.
25
right that there is no affixing, theres no proof that this
Youre
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was affixed in the way that the Third Circuit imagined was
necessary -- not imagined but proclaimed was necessary.
Your assertion would be that the allonge that was
executed two weeks ago should not be considered as an
appropriate transfer because it was post-petition, it was in
the litigation, it wasnt effective as of the date of the
proof of claim or better yet, as of the date of the filing of
the petition and that therefore, it is invalid.
MR. LEVITT:
10
THE COURT:
Correct, Your Honor.

And that is a very legitimate and
11
important issue and I would appreciate Mr. Kaplan dealing with
12
that.
13
MR. LEVITT:
And so getting to the other portion,
14
Your Honor, the only -- and it has nothing to do with holder
15
in due course, were not raising the fraud issue, were not
16
raising those issues.
17
the right to enforce the note.
18
luckily I have a Third Circuit decision that makes it easy.
19
With regard to the other, theres only one other way to
20
enforce and thats to take the rights of the transferee --
21
transferor under the Third Circuit decision and under 3-203.
22
And again there, Your Honor, if my position is the
The issue is does this creditor have

So with regard to the allonge,
23
trust has to be in possession of the note and the trust has to
24
prove that it took possession and if were going to deal with
25
the Pooling and Servicing Agreement -- and, Your Honor, one of
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the reasons why I wasnt moving it into evidence was because
to me it wasnt competent evidence at this point, again, it
wasnt my burden, but if counsel is going to find the
legitimate document thats recorded with the SEC, well thats
going to be the Bible, Your Honor, and thats going to say
that this note had to be delivered.
Whether it ultimately ended up with the trust --
with the servicer, the Pooling and Servicing Agreement, if
its at all close to this draft or like every other Pooling
10
and Servicing Agreement Ive read, its going to say it would
11
have had to be physically transferred first from Countrywide
12
was the originator to the depositor, and then from the
13
depositor ultimately to the trust.
14
The physical documents according to the Pooling and
15
Servicing have to be transferred and in this document youre
16
going to see it had to be endorsed.
17
that here.
18
physically transferred, meaning theres delivery receipts
19
showing they were physically transferred from A to B, from B
20
to C, and if C decided to let its agent hold them, I think,
21
Your Honor --
22
Were not going to have
So if they can prove that these documents were
THE COURT:
Well, theres no question on this record
23
and, you know, Im ready to accept it as fact that these
24
original documents never moved.
25
testimony.
I mean, that was the
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MR. LEVITT:
And if thats the case, Your Honor, I
think were done because unless the documents were physically
transferred, the trust ultimately could decide to let its
agent -- you know, Countrywide here, despite the witnesss
beliefs and assertions, Countrywide here is wearing two
different hats, its wearing the hat as Countrywide Home
Mortgage, the one that originated these mortgages, packaged
them and got rid of them as quickly as they possibly could,
thats hat number one, and then as another way to make money,
10
theyre a servicer.
11
THE COURT:
12
MR. LEVITT:
Right.
So its two different -- from all
13
practical purposes and in fact I think the Pooling and
14
Servicing Agreement will show, its two separate and distinct
15
legal entities, both Countrywide entities, now Bank of America
16
entities.
17
up securitizing and selling this loan they would have had to
18
have followed the terms of the Pooling and Servicing Agreement
19
to get it into the hands of the trust and then D, which is
20
Countrywide the servicer, could have gotten possession.
21
even if it meant -- even if they stayed in the same vault but
22
if it meant that there was a delivery receipt from A to D or A
23
to B to C to D, thats what they have to prove.
24
25
So if A, which is Countrywide the originator, ended
And
And because theyre saying that, now maybe they do

have those delivery receipts and if they want to produce them,
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thats great, but if that document never moved from that safe,
first of all theyre in violation of their Pooling and
Servicing Agreement, theyre in violation of the UCC -- were
done.
THE COURT:
If theyre in violation of the UCC, Im
agreeing with you.
If theyre in violation of the Pooling and
Servicing Agreement, I wonder how a debtor can avail
themselves of enforcement of the pooling and servicing --
MR. LEVITT:
10
THE COURT:
11
MR. LEVITT:
12
Im sorry?
Theyre the third-party beneficiary of
this contract.
13
14
Third-party beneficiary.
THE COURT:
Beneficiary in terms of where the
documents are -- thats a tough one.
15
MR. LEVITT:
In terms of -- and sometimes its
16
third-party detriment too because we have all these problems
17
of the way these servicers act, but the reality is, Your
18
Honor --
19
THE COURT:
20
MR. LEVITT:
Its a whole other story.

-- were referenced, again, theyre
21
going to produce the document, were going to be referenced as
22
one of the loans that are subject to this Pooling and
23
Servicing Agreement.
24
THE COURT:
25
Yes, but the moving around of the
documents are not for the benefit of the third-party
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beneficiary.
You can make the argument that they are because
they act upon the UCC protections of knowing whos holding
what.
out as we go, but heres what I need, counsel.
submission didnt focus, I would -- because you didnt have
the --
Thats not an unreasonable argument and Im thinking it
MR. LEVITT:
THE COURT:
MR. LEVITT:
10
THE COURT:
Because your
I --- the factual basis -Correct.

-- now you do, I would appreciate your
11
honing in on your arguments.
12
the affixing as weve said, but Im interested in the
13
possession element.
14
defendant to amplify upon their argument by future submission,
15
not only of a document that is a final version if you have it
16
and can get it and can certify that thats what it is and a
17
focus on what provisions in that document I should -- on both
18
sides pay attention to -- obviously, when you get it you
19
provide it to counsel as well, in addition to any argument
20
that you would focus me on.
21
They are to -- weve eliminated
At the same time that I allow the
So its half-baked.
Weve made some progress.
22
Weve understood certain factual predicates that the documents
23
remained where they were, that the allonge was created two
24
weeks ago and those are important facts to fit into the
25
equation.
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Did you have a comment, sir?
MR. KAPLAN:
Yeah, Im just -- Im just a little --
and believe me, I understand where Your Honor is heading.
not -- I know Im not going to change Your Honors mind, but
Im a little troubled by the fact that were accepting a
representation here.
Department, this witness is not the person that was
responsible for the Pooling and Servicing Agreement or how
these documents are dealt with.
10
Im
And this witness is in the Litigation
I think at the very least, even if we dont have
11
live testimony, we need to have something from someone who can
12
say theyre custodian of records that truly tracks this.
13
Were accepting a representation --
14
THE COURT:
15
MR. KAPLAN:
Which representation?
The representation that they stayed in
16
the same vault and they never moved.
17
Honor.
Were -- this is --
18
THE COURT:
19
MR. KAPLAN:
20
But lets examine --- and a lot of that is counsels
representation.
21
22
We dont know that, Your
THE COURT:
-- Ms. DeMartini in terms of her
knowledge of that fact.
23
EXAMINATION
24
BY THE COURT:
25
Youve testified that these documents, the originals, the
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files --
Have remained with Countrywide.
-- stayed with -- now, are there two different entities?
This note was entered into with Countrywide Home Loans, Inc.
Yes.
Is that the same as Countrywide Home Loan Servicing, LP?
Countrywide Home Loan Servicing, LP is the -- is our
service -- is the portion of the business that does the
servicing of the loan so they are slightly different in that
10
they were both part of the -- what was formerly Countrywide
11
Financial Corporation.
12
was the servicing portion of that business.
13
Countrywide Home Loans would have been the ones that
14
originated the loan.
15
16
company.
17
Yes.
18
And with which company, the servicer or the --
19
Ive always been involved with servicing.
20
In the servicing.
21
Yes.
22
And what were your positions with servicing?
23
Oh, Ive had a lot of positions with servicing.
24
a customer service representative, Ive been a supervisor,
25
Ive been a trainer, Ive been a training developer, Ive
Countrywide Servicing Home Loans, LP

They would -- and
Well, lets talk first about your experience with the

You said that you started about ten years ago?
Ive been
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managed our Policies and Procedures writers, Ive been a
Communications leader, Ive been a senior team leader, Ive
been a team leader auditor, a team leader trainer -- Ive done
all kinds of things all within the customer contact area of
servicing.
And as being part of customer contact we had to --
we were involved in every aspect of the servicing.
We were
the ones that did all of the speaking to the borrowers about
anything to do with their loans so I had to know about
10
everything in order to be able to do that and in order to be
11
able to train the customer service representatives.
12
In order to do that, as I stated before, I went over
13
to the -- we were called the Case Management Department; now
14
were called the Litigation Management Department.
15
part of servicing as well under -- under -- in the loan admin
16
servicing, what used to be loan admin servicing as a
17
supervisor last September.
18
19
Countrywide Servicing have you had with the loan originator
20
aspect of the company?
21
22
originations of the -- of the loans.
23
involved after the loan is established and were the ones that
24
then deal with everything after the fact.
25
We are
What contact, if any, during your experience with
Ive never been involved specifically with the

As a servicer, we get
What do you -- are you aware of the procedures that occur
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internally as between the originator and the servicer as soon
as the loan is given?
we would have called boarded our system.
with it from the time that it boarded on --
What does that mean?
Boarded is when it would get put into the computer system.
That would be when the documents are all imaged and then
stored.
Well, after the loans originated, then its going to what

I would be familiar
That all happens when the loan comes on board or
10
becomes a part of our servicing.
What happens to it prior to
11
that as far as the origination process inasmuch as the
12
underwriting or any of that, that Im not as familiar with,
13
no.
14
15
that?
16
17
documents themselves, we have a Documents Department that
18
would be in charge of imaging and then they would be the ones
19
that would be storing the original documents.
20
system --
21
Is that within your servicing company?
22
That would be under our servicing company, yes.
23
Have you ever dealt in that department -- the Documents
24
Department?
25
When the file is -- when the loan is boarded, who does
Let me find the best way to describe that.
Well, the
We have a
I have not physically worked in that department.
Ive
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1
been in that building, I -- but for me to specifically be the
one doing that, no, I havent.
lets say or --
some of them are stored -- theyre stored there and then we
also have other storage facilities.
documents are in our building because I looked these ones up,
but --
Have you had occasion to go there to look for a document
Ive had occasion to speak to people -- the documents --
These particular
10
What do you mean, youve looked these up -- these ones up?
11
Well, when we went to order the originations file we
12
looked -- looked for the -- the documents.
13
been previously requested by our Foreclosure Department and so
14
thats where theyre located right now.
15
documents are in the Foreclosure Department.
16
The original physical documents?
17
Yeah.
18
So is it your custom to request original documents --
19
The --
20
-- from this department when the Litigation Department
21
needs them?
22
23
various things with whether its within a foreclosure or a
24
bankruptcy.
25
were being asked to prove something, then its becoming more
The documents had
The physical
If theyre requested by counsel, if theyre requested for
But if theres something that comes up where
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customary lately.
It never used to be to where the originals were ever
requested but lately more and more of the time of day of
things around the country, we are being asked to physically
produce the originals more frequently.
Department?
Document Request.
And you would direct those inquiries to the Document
Yes, Document Request.
Its our DMS system, its our
10
And so to your knowledge, the original documents, the
11
origination documents, the notes and the mortgages are
12
maintained in that facility?
13
Yes.
14
To your knowledge, are they ever moved except for
15
inquiries from counsel?
16
transfer of ownership?
17
18
this many millions of loans as we have I wouldnt presume to
19
say that, but it is not customary for them to move.
20
21
they would move or whether and to what extent theyre ever
22
moved?
23
24
testifying to, no.
25
Are they ever moved to follow the
I cant say that theyre never moved because, I mean, with
Do you have personal knowledge of under what circumstances
Not -- not specifically to what I would be comfortable
Okay.
In terms of this particular transaction, from your
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experience of requesting these original documents, were you
able to establish that these were not moved?
call the 400 Building which is the building that were --
where were at and we were able to establish that thats where
theyre located and thats -- we were still in the process of
trying to physically get them to bring them here today but it
just -- I wasnt able to obtain them in time.
We were able to establish that theyre in our -- what we
And your information is that they may be at the
10
Foreclosure Department, but are you certain that they werent
11
moved out of the servicing company?
12
13
something internally like that a lot of times it will go Fed
14
Ex so that we have that tracking so thats how I know that
15
they went there because I have the tracking number --
16
I see.
17
-- so thats how I know that theyre there, and I dont
18
have any receipt or any tracking that theyve ever moved
19
beyond that.
20
We had Federal Express tracking.
Even when we move
Understood.
21
THE COURT:
22
MR. KAPLAN:
No, Your Honor.
23
MR. LEVITT:
No, Your Honor.
24
THE COURT:
25
Did I generate additional questions?
All right.
Are there any other
questions for Ms. DeMartini?
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MR. LEVITT:
THE COURT:
3
4
No, Your Honor.

Thank you, Ms. DeMartini.
You may step
down.
(Witness excused)
5
6
* * *
7
8
C E R T I F I C A T I O N
I, Diane Gallagher, court approved transcriber,

certify that the foregoing is a correct transcript from the
official electronic sound recording of the proceedings in the
above-entitled matter.
/s/Diane Gallagher
November 22, 2010
DIANE GALLAGHER
DIANA DOMAN TRANSCRIBING
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FOR PUBLICATION
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW JERSEY
In the Matter of
Case No. 08-18700-JHW
John T. Kemp
Debtor
John T. Kemp
Adversary No. 08-2448

Plaintiff
v.
Countrywide Home Loans, Inc.
Defendant
OPINION
FILED
JAMES J. WALDRON, CLERK
APPEARANCES:
Bruce H. Levitt, Esq.

Levitt & Slafkes, PC
76 South Orange Avenue, Suite 305
South Orange, New Jersey 07079
Counsel for the Debtor
November 16. 2010

U.s. BANKRUPTCY COURT
CAMDEN, N.J.
BY: Theresa O'Brien, Judicial
Assistant to Chief Judge Wlzmur
Harold Kaplan, Esq.

Dori 1. Scovish, Esq.
Frenkel, Lambert, Weiss, Weisman & Gordon, LLP
80 Main Street, Suite 460
West Orange, New Jersey 07052
Counsel for the Defendant
Before the court for resolution is the debtor's adversary complaint

seeking to expunge the proof of claim filed on behalf of the Bank of New York
by Countrywide Home Loans, Inc. as servicer. The debtor challenges the
creditor's opportunity to enforce the obligation alleged to be due, based
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primarily on the fact that the underlying note executed by the debtor was not
properly indorsed to the transferee, and was never placed in the transferee's
possession. Under the New Jersey Uniform Commercial Code, the note, as a
negotiable instrument, is not enforceable by the Bank of New York under these
circumstances. The plaintiff/ debtor's challenge to the proof of claim is
sustained on this record.
PROCEDURAL HISTORY
On May 9, 2008, the debtor, John T. Kemp, filed a voluntary petition for
relief under Chapter 13 of the Bankruptcy Code. The debtor scheduled an
ownership interest in several properties, including one located at 1316 Kings
Highway, Haddon Heights, New Jersey, the property at issue in this
proceeding. Schedule D of the debtor's petition, listing creditors holding
secured claims, listed Countrywide Home Loans as both the flrst and second
mortgagee, with claims of $167,000 and $42,000, respectively, against the
1316 Kings Highway property. The debtor's Chapter 13 plan proposed to make
payments over 60 months to satisfy priority claims and to cure arrearages on
three separate mortgages, including the two Countrywide mortgages. 1
The debtor filed an amended plan on October 3, 2008 which was

conflrmed on December 11, 2008 at $2,081 for 54 months. The modifled plan
increased the arrearage to be paid to Countrywide from $18,000 to $34,000,
-2-
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On June 11,2008, the defendant herein, Countrywide Home Loans, Inc.

(hereinafter "Countrywide"), identifying itself as the servicer for the Bank of
New York, filed a secured proof of claim in the amount of $211,202.41,
including $40,569.69 in arrears, noting the property at 1316 Kings Highway as
the collateral for the claim. 2 The debtor filed this adversary complaint on
October 16,2008 against Countrywide, seeking to expunge its proof of claim. 3
The debtor asserts that the Bank of New York cannot enforce the underlying
obligation.
and maintained the second Countrywide mortgage arrears at $6,000. A second

modified plan was filed on April 15, 2010 and is currently scheduled for
confirmation on December 8,2010. The latest modified plan does not list
Countrywide as a creditor to be treated under the plan.
Although the debtor listed two mortgages held by Countrywide
against 1316 Kings Highway in his schedules, Countrywide only flied one proof
of claim regarding one mortgage and note.
2
In 2008, Countrywide Financial Corporation, the umbrella

organization for Countrywide Home Loans, Inc., was purchased by the Bank of
America Corporation. Effective April 27, 2009, Countrywide Home Loans, Inc.
changed its name to BAC Home Loan Servicing, L.P. ("BAC Servicing"). Motion
to Dismiss, Van Beveren Certif. at 1. On July 1, 2010, a "Transfer of Claim for
Security" was filed on the debtor's claim register, transferring the claim from
"Countrywide Home Loans, Inc., servicer for Bank of New York" to "BAC Home
Loan Servicing, LP". In this opinion, I will continue to refer to the defendant as
Countrywide.
3
-3-
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FACTS
In his complaint, the debtor does not dispute that he signed the original
mortgage documents in question. The note and mortgage were executed by
the debtor on May 31, 2006. The note, designated as an "Interest Only
Adjustable Rate Note", listed the lender as "Countrywide Home Loans, Inc." No
indorsement appeared on the note. Accompanying the note was an unsigned
"Allonge to Note" dated the same day, May 31, 2006, in favor of "America's
Wholesale Lender", directing that the debtor "Pay to the Order of Countrywide
Home Loans, Inc., d/b/a America's Wholesale Lender.,,4
The mortgage, in the amount of $167,000, listed the lender as "America's

Wholesale Lender". Mortgage Electronic Registration Systems, Inc., or "MERS",
is named as "the mortgagee", and is authorized to act "solely as the nominee"
for the lender and the lender's successors and assigns. The mortgage
references the promissory note signed by the borrower on the same date. The
mortgage was recorded in the Camden County Clerk's Office on July 13, 2006.
Shortly after the execution by the debtor of the note and mortgage, the
4
The record does not reflect whether the unsigned allonge was
physically affixed to the note.
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instruments executed by the debtor were apparently pooled with other similar
instruments and sold as a package to the Bank of New York as Trustee. On
June 28, 2006, a Pooling and Servicing Agreement ("PSA" or "the Agreement")
was executed by CWABS, Inc. as the depositor, with Countrywide Home Loans,
Inc., Park Monaco, Inc. and Park Sienna, LLC as the sellers, Countrywide
Home Loans Servicing LP ("Countrywide Servicing") as the master servicer, and
the Bank of New York as the Trustee. Pursuant to the Agreement, the
depositor was directed to transfer the Trust Fund, consisting of specified
mortgage loans and their proceeds, including the debtor's loan, to the Bank of
New York as Trustee, in return for certificates referred to as Asset-backed
Certificates, Series 2006-8. The sellers sold, transferred or assigned to the
depositor "all the right, title and interest of such Seller in and to the applicable
Initial Mortgage Loans, including all interest and principal received and
receivable by such Seller." PSA 2.01(a) at 52. In tum, the depositor
immediately transferred "all right title and interest in the Initial Mortgage
Loans," including the debtor's loan, to the Trustee, for the benefit of the
certificate holders. Id.
The Agreement expressly provided that in connection with the transfer of

each loan, the depositor was to deliver "the original Mortgage Note, endorsed by
manual or facsimile signature in blank in the following form: 'Pay to the order
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of _ _ _ _ _ without recourse', with all intervening endorsements that show

a complete chain of endorsement from the originator to the Person endorsing
the Mortgage Note." PSA 2.01(g)(i) at 56. Most significantly for purposes of
this discussion, the note in question was never indorsed in blank or delivered
to the Bank of New York, as required by the Pooling and Servicing Agreement.
On March 14,2007, MERS, as the nominee for America's Wholesale

Lender, assigned the debtor's mortgage to the Bank of New York as Trustee for
the Certificateholders CWABs, Inc. Asset-backed Certificates, Series 2006-8.
The assignment purported to assign "a certain mortgage dated May 31,2006 ..
. [tjogether with the Bond, Note or other obligation described in the Mortgage,
and the money due and to become due thereon, with the interest." The
assignment provided further that the "Assignor covenants that there is now
due and owing upon the Mortgage and the Bond, Note or other obligation
secured thereby, the sum of$167,199.92 Dollars principal with interest
thereon to be computed at the rate of9.530 percent per year." The assignment
was recorded with the County Clerk on March 24, 2008.
At the trial of this matter, Countrywide produced a new undated"Allonge

to Promissory Note", which directed the debtor to "Pay to the Order of Bank of
New York, as Trustee for the Certificateholders CWABS, Inc., Asset-backed
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Certificates, Series 6006-8."5 The new allonge was signed by Sharon Mason,
Vice President of Countrywide Home Loans, Inc., in the Bankruptcy Risk
Litigation Management Department. Linda DeMartini, a supervisor and
operational team leader for the Litigation Management Department for BAC
Home Loans Servicing L.P. ("BAC Servicing"V testified that the new allonge
was prepared in anticipation of this litigation, and that it was signed several
weeks before the trial by Sharon Mason.
As to the location of the note, Ms. DeMartini testified that to her

knowledge, the original note never left the possession of Countrywide, and that
the original note appears to have been transferred to Countrywide's foreclosure
unit, as evidenced by internal FedEx tracking numbers. She also confirmed
that the new allonge had not been attached or otherwise affIXed to the note.
She testified further that it was customary for Countrywide to maintain
5
The allonge misidentifies the Asset-backed Certificates as "Series
6006-8" rather than "Series 2006-8."
6
Ms. DeMartini testified that Countrywide Home Loans, Inc., the
originator of the note and mortgage at issue here, and Countrywide Home
Loans Servicing LP, the s~rvicer of the loan both before and after the sale of the
loan, were and are two different legal entities under one corporate umbrella.
Her understanding that the entity known as Countrywide Home Loans
Servicing LP became BAP Home Loans Servicing LP when Bank of America took
over the Countrywide entities differs from the representation made in papers
submitted by the defendant herein that the entity known as Countrywide Home
Loans, Inc. became BAP Home Loan Servicing LP. See n. 3.
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possession of the original note and related loan documents.
In a supplemental submission dated September 9,2009, the defendant

asserted that "the Defendant/Secured Creditor located the original Note. The
original Note with allonge and Pooling and Servicing Agreement are available
for inspection.,,7 When the matter returned to the court on September 24,
2009, counsel for the defendant represented to the court that he had the
original note, with the new allonge now attached, in his possession. No
additional information was presented regarding the chain of possession of the
note from its origination until counsel acquired possession.
In sum, we have established on this record that at the time of the filing of
the proof of claim, the debtor's mortgage had been assigned to the Bank of New
7
In a bizarre twist, in the same September 9,2009 submission,
Countrywide produced a copy of a "Lost Note Certification," dated February 1,
2007, which indicated that the original note had been delivered to the lender
on the origination date and thereafter "misplaced, lost or destroyed, and after a
thorough and diligent search, no one has been able to locate the original Note."
The defendant asserted for the first time that the "whereabouts of the Note
could not be determined" at the time that the proof of claim was filed. Def.
Suppl. Subm. at 6. As a result, Countrywide claimed that it was unable to affix
the allonge to the note until after the original note had been rediscovered. At
the next hearing on September 24,2009, counsel was not able to explain the
inconsistencies between the lost note certification, Ms. DeMartini's testimony,
and the "rediscovery" of the note, and asked that the lost note certification be
disregarded. T13-15 to 16 (9/24/2009).
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York, but that Countrywide did not transfer possession of the associated note
to the Bank. Shortly before trial in this matter, the defendant executed an
allonge to transfer the note to the Bank of New York; however, the allonge was
not initially affixed to the original note, and possession of the note never
actually changed. The Pooling and Servicing Agreement required an
indorsement and transfer of the note to the Trustee, but this was not
accomplished prior to the filing of the proof of claim. The defendant has now
produced the original note and has apparently affixed the new allonge to it, but
the original note and allonge still have not been transferred to the possession of
the Bank of New York. Countrywide, the originator of the loan, flled the proof
of claim on behalf of the Bank of New York as Trustee, claiming that it was the
servicer for the loan. Pursuant to the PSA, Countrywide Servicing, and not
Countrywide, Inc., was the master servicer for the transferred loans. 8 At all
relevant times, the original note appears to have been either in the possession
8
According to a Prospectus Supplement dated June 30, 2006, flled
by Countrywide, Inc. with the Securities and Exchange Commission, see
www.sec.gov, Countrywide Servicing was created to service the loans originated
by Countrywide, Inc. The Prospectus notes that "Countrywide Home Loans
expects to continue to directly service a portion of its loan portfolio," while
transferring new mortgage loans to Countrywide Servicing. Prospectus
Supplement at 40. In addition, because "certain employees of Countrywide
Home Loans became employees of Countrywide Servicing, Countrywide
Servicing has engaged Countrywide Home Loans as a subservicer to perform
certain loan servicing activities on its behalf." Id. Because Countrywide Home
Loans, Inc. designated itself as the servicer for the Bank of New York on the
proof of claim at issue here, I assume for these purposes that it is acting in
that capacity on this loan.
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of Countrywide or Countrywide Servicing. 9
DISCUSSION
With this factual backdrop, we turn to the issue of whether the challenge
to the proof of claim filed on behalf of the Bank of New York, by its servicer
Countrywide, can be sustained. Under the Bankruptcy Code, a claim is
deemed allowed unless a party in interest objects. 11 U.S.C. 502(a). If an
objection to a claim is made, the claim is disallowed "to the extent that ...
such claim is unenforceable against the debtor and property of the debtor,
under any agreement or applicable law for a reason other than because such
claim is contingent or unmatured." 11 U.S.C. 502(b)(I).
Countrywide's claim here must be disallowed, because it is

unenforceable under New Jersey law on two grounds. First, under New
Jersey's Uniform Commercial Code ("UCC") provisions, the fact that the owner
The record is unclear about whether the original note has been in
the possession of Countrywide Home Loans, Inc. or Countrywide Home Loans
Servicing LP. Ms. DeMartini testified both that the original note was always
located in the Countrywide origination file (presumably at Countrywide Home
Loans, Inc.) and that the servicer actually retained possession of the original
note (presumably Countrywide Home Loans Servicing LP). She also testified
that the "Documents Department" was charged with imaging and storing the
original documents, but the record is not clear about which of the two entities
housed the Documents Department.
9
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of the note, the Bank of New York, never had possession of the note, is fatal to
its enforcement. Second, upon the sale of the note and mortgage to the Bank
of New York, the fact that the note was not properly indorsed to the new owner
also defeats the enforceability of the note.
Under New Jersey law, the enforcement of a promissory note that is

secured by a mortgage is governed by the UCC. The note, at issue here, made
payable to Countrywide, providing for interest and an unconditional promise to
pay the lender, is a "negotiable instrument" under the New Jersey UCC, which
defines a negotiable instrument as "an unconditional promise or order to pay a
fixed amount of money, with or without interest or other charges described in
the promise or order, if it: (1) is payable to bearer or to order at the time it is
issued or first comes into possession of a holder; (2) is payable on demand or at
a definite time." N.J.S.A. 12A:3-104. A party is entitled to enforce a negotiable
instrument if it is "the holder of the instrument, a nonholder in possession of
the instrument who has the rights of a holder, or a person not in possession of
the instrument who is entitled to enforce the instrument pursuant to
12A:3-309 or subsection d. of 12A:3-418." N.J.S.A. 12A:3-301. In this case,
the creditor may not enforce the instrument under any of the three statutory
qualifiers.
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Holder.
A "holder" is defined as "the person in possession if the instrument is

payable to bearer or, in the case of an instrument payable to an identified
person, if the identified person is in possession." N.J.S.A. 12A:1-201(20).
"Mere ownership or possession of a note is insufficient to qualify an individual
as a 'holder'." Adams v. Madison Realty & Dev. Inc., 853 F.2d 163, 166 (3d
Cir. 1988). Where, as here, the ownership of an instrurrient is transferred, the
transferee's attainment of the status of "holder" depends on the negotiation of
the instrument to the transferee. N.J.S.A. 12A:3-201(a). The two elements
required for negotiation, both of which are missing here, are the transfer of
possession of the instrument to the transferee, and its indorsement by the
holder. N.J.S.A. 12A:3-201(b).
As to the issue of possession, we are not certain on this record whether

the party in possession of the note is Countrywide or Countrywide Servicing. 10
What we do know is that the note was purchased by the Bank of New York as
Trustee, but never came into the physical possession of the Bank. Because the
Bank of New York never had possession of the note, it can not qualify as a
"holder" under the New Jersey UCC. See Dolin v. Darnall, 115 N.J.L. 508, 181
10
See n. 9.
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A. 201 (E&A 1935) ("Since the plaintiff was not 'in possession of the notes in
question, he was neither the 'holder' nor the 'bearer' thereof. ").11
The second element required to negotiate an instrument to the

transferee, Le., indorsement of the instrument by the holder, is also missing
here. An indorsement means "a signature, other than that of a signer as
maker, drawer, or acceptor, that alone or accompanied by other words is made
on an instrument for the purpose of negotiating the instrument, restricting
payment of the instrument, or incurring indorser's liability on the instrument."
N.J.S.A. 12A:3-204. The indorsement may be on the instrument itself, or it
may be on "a paper afflXed to the instrument." Id. Such a paper is called an
"allonge", defmed as "[a] slip of paper sometimes attached to a negotiable
instrument for the purpose of receiving further indorsements when the original
paper is filled with indorsements." See Black's Law Dictionary at 88 (9 th Ed.
2009).
The significance of indorsement and affixation requirements to achieve
11
If Countrywide was in possession of the note, then it would have
had "holder" status as of the date of the petition filing date, because the note
was payable to Countrywide, no indorsement or allonge had been executed,
and Countrywide was in possession of the original note. However, Countrywide
did not flle the claim on its own behalf. Rather, it flled the claim as "servicer
for Bank of New York." The qualification of the Bank of New York, rather than
Countrywide, to enforce the note is at issue.
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holder status, and thereby qualify to enforce a note against the maker, was
explained by the Third Circuit in Adams v. Madison Realtv & Dev. Inc., supra.
The court explained that the maker of the note must have certainty regarding
the party who is entitled to enforce the note.
From the maker's standpoint, therefore, it becomes essential to
establish that the person who demands payment of a negotiable
note, or to whom payment is made, is the duly qualified holder.
Otherwise, the obligor is exposed to the risk of double payment, or
at least to the expense of litigation incurred to prevent duplicative
satisfaction of the instrument. These risks provide makers with a
recognizable interest in demanding proof of the chain of title.
Consequently, plaintiffs here, as makers of the notes, may properly
press defendant to establish its holder status.
853 F.2d at 168.
At the time of the Adams' decision, the New Jersey UCC provided in
relevant part that "[a]n indorsement must be written by or on behalf of the
holder and on the instrument or on a paper so firmly affixed thereto as to
become a part thereof." N.J.S.A. 12A:3-202(2) (1961).12 The UCC Commentary
explained that this language was in conformance with those
decisions holding that a purported indorsement on a mortgage or
other separate paper pinned or clipped to an instrument is not
12
The New Jersey Study Comment noted that the "wording in
reference to indorsements [was] changed from 'or upon a paper attached
thereto', to 'so firmly affixed thereto as to become a part thereof. This change
merely implement[ed] the ancient doctrine of allonge."
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sufficient for negotiation. The indorsement must on the

instrument itself or on a paper intended for the purpose is so
firmly affixed to the instrument as to become an extension or part
of it. Such a paper is called an allonge.
In 1995, Chapter 3 of Title 12A was amended and subsection 2 of 12A:3-202

was revised, renumbered, and included as the last sentence in N.J.S.A. 12A:3204(a). As revised, the provision now states that "[f]or the purpose of
determining whether a signature is made on an instrument, a paper afflXed to
the instrument is a part of the instrument." N.J.S.A. 12A:3-204(a).
In this case, we had neither a proper indorsement on the note itself, nor
an allonge that was executed at the time the proof of claim was filed. An
allonge purporting to negotiate the note to the Bank of New York was not
executed until shortly before the original trial date, and was not affixed to the
original note until the second trial date. Even if the newly executed allonge is
recognized as a valid indorsement of the note, under these circumstances, the
Bank of New York does not qualify as a holder, because it never came into
possession of the note. 13
13
As an additional argument in support of the proposition that the
Bank of New York qualifies as a holder who may enforce the note, the claimant
cites to Mulert v. National Bank of Tarentum, 210 F. 857, 860 (3d Cir. 1913)
for the proposition that it had constructive possession of the note because
Countrywide intended to transfer possession, and that constructive possession
is sufficient to permit the transferee to enforce the note. This proposition is not
sustainable in light of the actual possession required under the New Jersey
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Nonholder in Possession.
Nor does the claimant qualify as a non-holder in possession who has the
rights of a holder. "A person may be a person entitled to enforce the
instrument even though the person is not the owner of the instrument or is in
wrongful possession of the instrument." N.J.S.A. 12A:3-301. The Official
Comment to section 3-301 adds that this definition:
includes a person in possession of an instrument who is not a

holder. A nonholder in possession of an instrument includes a
person that acquired rights of a holder by subrogation or under
Section 3-203(a). It also includes both a remitter that has received
an instrument from the issuer but has not yet transferred or
negotiated the instrument to another person and also any other
person who under applicable law is a successor to the holder or
otherwise acquires the holder's rights.
Id. at UCC Comment to 3-301. Countrywide, the originator of the loan and
the original "holder" of the note, sold the note to the Bank of New York as
Trustee. In this way, the Bank of New York is a successor to the holder. As a
successor to the holder of the note, the Bank of New York would qualify as a
non-holder in possession who could enforce the note by its servicer if it had
possession of the note. Because the Bank of New York does not have
possession of the note, and never did, it may not enforce the note as a
UCC. See N.J.S.A. 12A:1-201(20).

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nonho1der in possession.
3.
Non-holder Not in Possession.
The third category that would enable a claimant to enforce the note
would be a person not in possession of the note who is entitled to enforce the
note pursuant to N.J.S.A. 12A:3-309 or subsection d. ofN.J.S.A. 12A:3-418.
Section 12A:3-309 concerns the enforcement of lost, destroyed or stolen
instruments. '4 The defendant presented a lost note certification to this court,
14
N.J.S.A. 12A:3-309 provides:
a. A person not in possession of an instrument is entitled to

enforce the instrument if the person was in possession of the
instrument and entitled to enforce it when loss of possession
occurred, the loss of possession was not the result of a transfer by
the person or a lawful seizure, and the person cannot reasonably
obtain possession of the instrument because the instrument was
destroyed, its whereabouts cannot be determined, or it is in the
wrongful possession of an unknown person or a person that
cannot be found or is not amenable to service of process.
b. A person seeking enforcement of an instrument under
subsection a. of this section must prove the terms of the
instrument and the person's right to enforce the instrument. If that
proof is made, 12A:3-308 applies to the case as if the person
seeking enforcement had produced the instrument. The court may
not enter judgment in favor of the person seeking enforcement
unless it finds that the person required to pay the instrument is
adequately protected against loss that might occur by reason of a
claim by another person to enforce the instrument. Adequate
protection may be provided by any reasonable means.
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but the factual predicate of the certificate conflicted with other facts presented
on this record, and we have dete=ined to disregard the certificate. '5 Section
12A:3-418, concerning payment or acceptance by mistake, does not apply here.
In a recent District Court decision from the District of Massachusetts,

the court rejected the enforcement of a note where the assignee of the note and
accompanying mortgage did not have possession of the note. Marks v.
Braunstein, No. 09-11402-NMG, 2010 WL 3622111 (D.Mass. Sept. 14, 2010).
In Marks, the assignee of the note and mortgage purchased the collateral for
the note, a co=ercial building, from the Chapter 7 trustee, fIled a secured
proof of claim, and sought to enforce the note and mortgage against the
proceeds from the sale. When the matter fIrst came on to be heard, the
claimant confIrmed that he was not in possession of the note and was unaware
of who was in possession of it. 16 Because the claimant acknowledged that he
was never in possession of the note, he was precluded from reliance on Section
3-309A of the Massachusetts UCC, which permits enforcement of a lost,
destroyed or stolen instrument, but requires possession of the instrument at
15
See n. 7.
Following the disallowance of the proof of claim by the court, the

claimant discovered the location of the note. However, the bankruptcy court
denied his motion for reconsideration of the disallowance. The denial was
affirmed by the District Court. Marks v. Braunstein, 2010 WL 3622111 at *5.
16
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some point. Citing to Premier Capital, LLC v. Gavin, 319 B.R. 27, 33 (1" Cir.
BAP 2004), the Marks court reflected that "[t]he purpose of the possession
requirement in Article 3 is to protect the Debtor from multiple enforcement
claims to the same note." Id. at *3. Acknowledging that conflicting
enforcement claims were not a concern in the case before it, the court
nevertheless applied the statutory requirements to hold that the note could not
be enforced by the claimant to collect proceeds otherwise due to the claimant
from the sale of the collateral on account of his secured claim.
Similarly,'in this case, the purchaser of the note and mortgage, the Bank
of New York, never had possession of the note. Therefore, under the Uniform
Commercial Code as adopted in New Jersey, the Bank of New York as Trustee
may not enforce the instrument.
On behalf of the Bank of New York, Countrywide contends that the

written mortgage assignment in this case, which purports to assign both the
note and mortgage in this case, and which was properly executed and recorded
with the appropriate county clerk's office, serves to properly transfer the note
to the new owner, enabling the new owner to enforce both the note and the
mortgage. The recorded assignment of mortgage does include provision for'the
assignment of the note as well. However, the recorded assignment of the
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mortgage does not establish the enforceability of the note. As discussed above,
the UCC governs the transfer of a promissory note. See 29 Myron C. Weinstin,
New Jersey Practice, Law of Mortgages, 11.2 at 749. The attempted
assignment of the note in the assignment of mortgage document, together with
the terms of the Pooling and Servicing Agreement, created an ownership issue,
but did not transfer the right to enforce the note.
The right to enforce an instrument and ownership of the

instrument are two different concepts. . .. Moreover, a person who
has an ownership right in an instrument might not be a person
entitled to enforce the instrument. For example, suppose X is the
owner and holder of an instrument payable to X. X sells the
instrument to Y but is unable to deliver immediate possession to Y.
Instead, X signs a document conveying all of X's right, title, and
interest in the instrument to Y. Although the document may be
effective to give Y a claim to ownership of the instrument, Y is not a
person entitled to enforce the instrument until Y obtains
possession of the instrument. No transfer of the instrument
occurs under Section 3-203(a) until it is delivered to Y.
N.J.S.A. 12A:3-203 (UCC Cmt. 1). Accordingly, the Bank of New York has a
valid claim of ownership, but may not enforce the note on the basis of the
reference to the note in the recorded assignment of the mortgage.
The fact that the proof of claim in question was filed by "Countrywide
Home Loans, Inc., as servicer for Bank of New York, Trustee" does not alter the
enforceability of the note. Bankruptcy Rule 3001(b) provides that a proof of
claim may be filed by either the creditor "or the creditor's agent."
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FED.R.BANKR.P.3001(b). Here, Countrywide, Inc. was the originator of the

note and mortgage, but sold both the note and mortgage to the Bank of New
York as Trustee, and filed the proof of claim as the "servicer" for the Bank of
New York. A servicer has standing to file a proof of claim on behalf of a
creditor. See,~, Greer v. O'Dell, 305 F.3d 1297, 1302 (11th Cir. 2002) ("A
servicer is a party in interest in proceedings involving loans which it services.");
In re Viencek, 273 B.R. 354, 358 (N.D.N.Y. 2002); In re Gulley, No.
07-33271-SGJ-13, 2010 WL 3342193, *9 (Bankr. N.D.Tex. Aug. 23, 2010)
("many courts have held that a mortgage servicer has standing to participate in
a debtor's bankruptcy case by virtue of its pecuniary interest in collecting
payments under the terms of a note"); In re Minbatiwalla, 424 B.R. 104, 109
(Bankr. S.D.N.Y. 2010); In re Conde- Dedonato, 391 B.R. 247, 250 (Bankr.
E.D.N.Y. 2008) ("A servicer of a mortgage is clearly a creditor and has standing
to file a proof of claim against a debtor pursuant to its duties as a servicer.").
But Countrywide, as the servicer, acts only as the agent of the owner of the
instrument, and has no greater right to enforce the instrument than its
principal.
See,~,
Greer v. O'Dell, 305 F.3d at 1303. Because the Bank of
New York has no right to enforce the note, Countrywide as its agent and
servicer cannot enforce the noteP
As noted, Countrywide Home Loans, Inc. is listed as the servicer

on the debtor's loan. However, there is serious question raised about the
authority of that entity to file a proof of claim on behalf of the Bank of New
17
-21-
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#1535317
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Page
22Main
of 22
Case Case
08-02448-JHW
25 Filed
11/16/10 Entered
11/17/1009:29:50
Desc
Document
Page 22 of 22
CONCLUSION
Because the claim f:tl.ed by "Countrywide Home Loans, Inc., servicer for
Bank of New York" cannot be enforced under applicable state law, the claim
must be disallowed under 11 U.S.C. 502(b)(I).
Dated:
November 16,2010
J]JDITH H. WIZMUR
CHIEF JUDGE
U.S. BANKRUPTCY COURT
York. A Power of Attorney dated November 15, 2005 was submitted, affording
Countrywide Home Loans Servicing LP, not Countrywide Home Loans, Inc., the
limited opportunity to perfo= all necessary acts to foreclose mortgage loans,
dispose of properties and modify or release mortgages, presumably including
the authority to file a proof of claim in a bankruptcy case.
-22-
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Page 1 of 22
NEW YORK STATE

DEPARTMENT OF FINANCIAL SERVICES
In the Matter of
OCWEN FINANCIAL CORPORATION,
OCWEN LOAN SERVICING, LLC
CONSENT ORDER PURSUANT TO NEW YORK BANKING LAW 44

The New York State Department of Financial Services (the Department) and Ocwen
Financial Corporation, the parent company of Ocwen Loan Servicing, LLC (together, Ocwen),
(collectively, the Parties) stipulate that:
WHEREAS, Ocwen is the fourth largest mortgage loan servicer and the largest servicer
of subprime loans in the United States, servicing an unpaid principal balance (UPB) of
approximately $430 billion. In New York alone, Ocwen services nearly 130,000 residential
home loans with a total UPB of more than $30 billion.
WHEREAS, Ocwen is a New York State-licensed mortgage banker and mortgage loan
servicer, pursuant to the New York Banking Law, and the Department is responsible for its
supervision and regulation;
WHEREAS, in the last five years, Ocwen has acquired mortgage servicing rights
(MSRs) for hundreds of billions of dollars in UPB from several major servicers, including
Litton Loan Servicing LP (Litton), Saxon Mortgage Services, Inc. (Saxon), and Homeward
Residential Holdings, Inc. (Homeward);
WHEREAS, in 2010 and 2011, the multistate examinations of Ocwen, Litton, and
Homeward identified numerous and significant violations of New York State laws and
regulations;
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WHEREAS, on September 1, 2011, in connection with Ocwens acquisition of Litton

and amid concerns regarding Ocwens rapid growth and capacity to properly acquire and service
a significant portfolio of distressed home loans, Ocwen and the Department entered into an
Agreement on Mortgage Servicing Practices (the 2011 Agreement), which required Ocwen to
adhere to certain servicing practices in the best interest of borrowers and investors;
WHEREAS, a June 2012 targeted examination of Ocwen revealed that Ocwen violated
the 2011 Agreement;
WHEREAS, as a result of Ocwens violation of the 2011 Agreement, Ocwen entered
into a Consent Order with the Department on December 5, 2012, which required Ocwen to retain
an independent compliance monitor (the Compliance Monitor) for two years to conduct a
comprehensive review of Ocwens servicing operations;
WHEREAS, the Department and the Compliance Monitor identified numerous and
significant additional violations of the 2011 Agreement, as well as New York State laws and
regulations;
NOW, THEREFORE, to resolve this matter, the Parties agree to the following:
Facts
1.
Ocwen has grown more than ten-fold in the last several years. Beginning in 2009,
Ocwen significantly expanded its servicing operations through the acquisition of several major
servicers of home loans, as well as the acquisition of MSRs for hundreds of billions of dollars in
UPB. From the end of 2009 to the end of 2013, Ocwens servicing portfolio grew from 351,595
residential loans with an aggregate UPB of $50 billion to 2,861,918 residential loans with an
aggregate UPB of $464.7 billion.
(Page 171 of Total)
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2.
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In 2010 and 2011, the Department participated in a multistate examination of
Ocwen, as well as examinations of Litton and Homeward, the entities ultimately acquired by
Ocwen. The examination of Ocwen identified, among other things, deficiencies in Ocwens
servicing platform and loss mitigation infrastructure, including (a) robo-signing, (b) inaccurate
affidavits and failure to properly validate document execution processes, (c) missing
documentation, (d) wrongful foreclosure, (e) failure to properly maintain books and records, and
(f) initiation of foreclosure actions without proper legal standing.
3.
The examinations of Litton and Homeward identified substantial deficiencies,
weaknesses, and violations of laws and regulations relating to, among other things, foreclosure
governance, implementation of modification programs, record keeping, required notifications,
and the charging of unallowable fees.
4.
The examination of Litton also revealed that, prior to Ocwens acquisition of
Litton, members of Littons information technology staff falsified documents provided to the
Department during the review of Littons information technology infrastructure.
5.
In connection with Ocwens acquisition of Litton in 2011 and in light of the
examination findings for both Ocwen and Litton, the Department sought to ensure that Ocwen
had sufficient capacity to properly acquire and manage a significant portfolio of distressed loans,
including the ability to effectively manage the increased volume and comply with requirements
under the federal Home Affordable Modification Program, internal loss mitigation policies and
procedures, and laws and regulations governing mortgage loan servicing and foreclosure
activities.
6.
To that end, Ocwen and the Department entered into an Agreement on Mortgage
Servicing Practices on September 1, 2011, which required Ocwen to: (a) establish and maintain
(Page 172 of Total)
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sufficient capacity to properly acquire and manage its significant portfolio of distressed loans to
ensure a smooth borrower transition; (b) engage in sound document execution and retention
practices to ensure that mortgage files are accurate, complete, and reliable; and (c) implement a
system of robust internal controls and oversight with respect to mortgage servicing practices
performed by its staff and third party vendors to prevent improper foreclosures and maximize
struggling borrowers opportunities to keep their homes.
7.
In June 2012, the Department conducted a targeted examination of Ocwen to
assess its compliance with the 2011 Agreement and Part 419 of the Superintendents
Regulations, which governs business conduct rules for servicers. The examination identified
gaps in the servicing records of certain loans that indicated repeated non-compliance by Ocwen,
including: (a) failing to send borrowers a 90-day notice prior to commencing a foreclosure
action as required under New York Real Property Actions and Proceedings Law (RPAPL)
1304, (b) commencing foreclosure actions on subprime loans without affirmatively alleging in
the complaint that Ocwen had standing to bring the foreclosure action as required by RPAPL
1302, and (c) commencing foreclosure actions without sufficient documentation of its standing
to do so.
8.
The targeted examination also identified instances that indicated widespread non-
compliance with the 2011 Agreement including: (a) failing to provide borrowers with the direct
contact information for their designated single point of contact, a customer care representative
whose role is to understand each assigned borrowers circumstances and history to ensure that
the borrower receives efficient and consistent customer care; (b) dual-tracking; (c) failing to
conduct an independent review of loan modification denials; (d) failing to demonstrate adoption
of policies and procedures to effectively track sanctioned third-party vendors, including local
(Page 173 of Total)
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foreclosure counsel; (e) failing to demonstrate implementation of policies and procedures to

verify borrower information on newly boarded accounts to accurately reflect the status and
current balance of the borrowers account; and (f) failing to ensure that trial or permanent
modifications granted to borrowers by a prior servicer are honored upon transfer to Ocwen.
9.
Consequently, on December 5, 2012, Ocwen entered into a Consent Order with
the Department, which required Ocwen to retain an independent compliance monitor for two
years. The Consent Order mandated that the Compliance Monitor, which would report directly
to the Department, would conduct a comprehensive review . . . of Ocwens servicing
operations, including its compliance program and operational policies and procedures. The
review would, at a minimum, consider (a) the adequacy of Ocwens staffing levels, (b) the
robustness of Ocwens established policies and procedures, (c) the fairness of servicing fees and
foreclosure charges, (d) the accuracy of borrower account information, (e) Ocwens compliance
with federal and state law, (f) borrower complaints and recordings of customer service, and (g)
Ocwens compliance with the Agreement.
10.
The Compliance Monitor began work in July 2013.
11.
In the course of the Compliance Monitors review, it identified numerous and
significant violations of the 2011 Agreement, as well as New York State laws and regulations.
12.
For example, a limited review by the Compliance Monitor of 478 New York loans
that Ocwen had foreclosed upon revealed 1,358 violations of Ocwens legal obligations, or about
three violations per foreclosed loan. These violations included:
failing to confirm that it had the right to foreclose before initiating foreclosure
proceedings;
failing to ensure that its statements to the court in foreclosure proceedings were
correct;
(Page 174 of Total)
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pursuing foreclosure even while modification applications were pending (dual

tracking);
failing to maintain records confirming that it is not pursuing foreclosure of
servicemembers on active duty; and
failing to assign a designated customer care representative.
13.
The Department and the Compliance Monitor also identified, among other things,
(a) inadequate and ineffective information technology systems and personnel, and (b) widespread
conflicts of interest with related parties.
Inadequate and Ineffective Information Technology Systems and Personnel
14.
In the course of its review, the Compliance Monitor determined that Ocwens
information technology systems are a patchwork of legacy systems and systems inherited from
acquired companies, many of which are incompatible. A frequent occurrence is that a fix to one
system creates unintended consequences in other systems. As a result, Ocwen regularly gives
borrowers incorrect or outdated information, sends borrowers backdated letters, unreliably tracks
data for investors, and maintains inaccurate records. There are insufficient controls in place
either manual or automatedto catch all of these errors and resolve them.
15.
For example, Ocwens systems have been backdating letters for years. In many
cases, borrowers received a letter denying a mortgage loan modification, and the letter was dated
more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30
days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed
by the time they received the backdated letter. In other cases, Ocwens systems show that
borrowers facing foreclosure received letters with a date by which to cure their default and avoid
foreclosureand the cure date was months prior to receipt of the letter. Ocwens processes
failed to identify and remedy these errors.
(Page 175 of Total)
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16.
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Moreover, Ocwen failed to fully investigate and appropriately address the
backdating issue when an employee questioned the accuracy of Ocwens letter dating processes
and alerted the companys Vice President of Compliance. Ocwen ignored the issue for five
months until the same employee raised it again. While Ocwen then began efforts to address the
backdating issue, its investigation was incomplete and Ocwen has not fully resolved the issue to
date, more than a year after its initial discovery.
17.
Ocwens core servicing functions rely on its inadequate systems. Specifically,
Ocwen uses comment codes entered either manually or automatically to service its portfolio;
each code initiates a process, such as sending a delinquency letter to a borrower, or referring a
loan to foreclosure counsel. With Ocwens rapid growth and acquisitions of other servicers, the
number of Ocwens comment codes has ballooned to more than 8,400 such codes. Often, due to
insufficient integration following acquisitions of other servicers, there are duplicate codes that
perform the same function. The result is an unnecessarily complex system of comment codes,
including, for example, 50 different codes for the single function of assigning a struggling
borrower a designated customer care representative.
18.
Despite these issues, Ocwen continues to rely on those systems to service its
portfolio of distressed loans. Ocwens reliance on technology has led it to employ fewer trained
personnel than its competitors. For example, Ocwens Chief Financial Officer recently
acknowledged, in reference to its offshore customer care personnel, that Ocwen is simply
training people to read the scripts and the dialogue engines with feeling. Ocwens policy is to
require customer support staff to follow the scripts closely, and Ocwen penalizes and has
terminated customer support staff who fail to follow the scripts that appear on their computer
screens. In some cases, this policy has frustrated struggling borrowers who have complex issues
(Page 176 of Total)
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that exceed the bounds of a script and have issues speaking with representatives at Ocwen
capable of addressing their concerns. Moreover, Ocwens customer care representatives in many
cases provide conflicting responses to a borrowers question. Representatives have also failed in
many cases to record in Ocwens servicing system the nature of the concerns that a borrower has
expressed, leading to inaccurate records of the issues raised by the borrower.
19.
Ocwens inadequate infrastructure and ineffective personnel have resulted in
Ocwens failure to fulfill its legal obligations. Prior to the Departments and the Compliance
Monitors review, Ocwen did not take adequate steps to implement reforms that it was legally
obligated to implement pursuant to the 2011 Agreement.
Widespread Conflicts of Interest with Related Parties
20.
The Departments review of Ocwens mortgage servicing practices also
uncovered a number of conflicts of interest between Ocwen and four other public companies (the
related parties),1 all of which are chaired by Mr. Erbey, who is also the largest individual
shareholder of each and the Executive Chairman of Ocwen. In addition to serving as chairman
of the board for Ocwen and each related company, Mr. Erbeys holdings in these companies total
more than $1 billion. Other Ocwen executives and directors also own significant investments in
both Ocwen and the related parties. Yet, Ocwen does not have a written policy that explicitly
requires potentially conflicted employees, officers, or directors to recuse themselves from
involvement in transactions with the related companies.
The related parties are, as of the date of this Consent Order, Altisource Portfolio Solutions, S.A.
(Altisource Portfolio), Altisource Residential Corporation, Altisource Asset Management Corporation,
and Home Loan Servicing Solutions Ltd., and any of their affiliates, predecessors and successors in
interest, both past and present, and any of their officers, directors, partners, employees, consultants,
representatives, and agents or other persons and entities acting under their control or on their behalf.
(Page 177 of Total)
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21.
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Despite Mr. Erbeys holdings in these companies, Mr. Erbey has not in fact
recused himself from approvals of several transactions with the related parties. Mr. Erbey, who
owns approximately 15% of Ocwens stock, and nearly double that percentage of the stock of
Altisource Portfolio, has participated in the approval of a number of transactions between the
two companies or from which Altisource received some benefit, including the renewal of
Ocwens forced placed insurance program in early 2014.
22.
Ocwens close business relationship with related companies is particularly evident
in its relationship with Altisource Portfolio, which has dozens of subsidiaries that perform feebased services for Ocwen. In one example, Altisource Portfolio subsidiary Hubzu, an online
auction site, hosts nearly all Ocwen auctions. In certain circumstances, Hubzu has charged more
for its services to Ocwen than to other customerscharges which are then passed on to
borrowers and investors. Moreover, Ocwen engages Altisource Portfolio subsidiary REALHome
Services and Solutions, Inc. as its default real estate agency for short sales and investor-owned
properties, even though this agency principally employs out-of-state agents who do not perform
the onsite work that local agents perform, at the same cost to borrowers and investors.
23.
Conflicts of interest are evident at other levels of the Ocwen organization. For
example, during its review, the Monitor discovered that Ocwens Chief Risk Officer
concurrently served as the Chief Risk Officer of Altisource Portfolio. The Chief Risk Officer
reported directly to Mr. Erbey in both capacities. This individual seemed not to appreciate the
potential conflicts of interest posed by this dual role, which was of particular concern given his
role as Chief Risk Officer.
(Page 178 of Total)
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Settlement Provisions
Monetary Payment
24.
Ocwen will pay the amount of $150 million as follows:

a. $100 million paid to the Department by December 31, 2014, as a civil monetary
penalty pursuant to New York Banking Law 44, to be used by the State of New
York for housing, foreclosure relief, and community redevelopment programs
supporting New Yorks housing recovery; and
b. $50 million deposited into an interest-bearing escrow account by December 31,
2014, to be paid as restitution to current and former Ocwen-serviced borrowers in
New York, as follows:
i. $10,000 to each borrower whose home was foreclosed upon by Ocwen
between January 1, 2009, and the date of this Consent Order; and
ii. The balance of the $50 million to be distributed equally among borrowers
who had foreclosure actions filed against them by Ocwen between January
1, 2009, and the date of this Consent Order, but in which Ocwen did not
complete such foreclosure.
25.
Ocwen agrees that it will not claim, assert, or apply for a tax deduction or tax
credit with regard to any U.S. federal, state, or local tax, directly or indirectly, for any portion of
the amount paid pursuant to this Consent Order.
Borrower Assistance
26.
For borrowers receiving payments pursuant to Paragraph 24(b)(ii), Ocwen will
evaluate such borrowers for all applicable modifications and other foreclosure alternatives in
light of their improved financial condition resulting from such payment.
10
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27.
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Beginning sixty (60) days after the date of execution of the Consent Order, and
for a period of two years thereafter, Ocwen will provide upon request by a New York borrower
that borrowers complete loan file, which includes all information from all systems, including
comment codes, at no cost to the borrower, regardless of whether such borrowers loan is still
serviced by Ocwen.
28.
Beginning sixty (60) days after the date of execution of the Consent Order,
Ocwen will provide every New York borrower who is denied a modification, short sale, or deedin-lieu of foreclosure, a detailed explanation of the reasons for denial.
29.
Beginning sixty (60) days after the date of execution of this Consent Order, for all
New York borrowers who have been reported negatively by Ocwen to credit agencies since
January 1, 2010, Ocwen will provide upon request at no cost a copy of such borrowers credit
report (including credit scores) no more than once a year, regardless of whether such borrowers
loan is still serviced by Ocwen. Ocwen will make sufficient staff available for borrowers to
inquire about their credit reporting and will dedicate the resources necessary to investigate such
inquiries and promptly correct any errors.
30.
The Operations Monitor will oversee Ocwens compliance with these borrower
assistance provisions and will work with Ocwen to develop appropriate procedures for such
compliance.
Operations Monitor
31.
The Department will select in its sole discretion an independent on-site operations
monitor (the Operations Monitor) that will report directly to the Department.
32.
The Operations Monitor will review and assess the adequacy and effectiveness of
Ocwens operations. Such an assessment will include but is not limited to the following areas:
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a. Information technology systems and personnel, including with respect to record

keeping and borrower communications;
b. Number of personnel and the training and expertise of its personnel in all
servicing operations;
c. Onboarding process for newly acquired mortgage servicing rights, including
Ocwens ability to onboard newly acquired MSRs without interruption to
servicing newly acquired loans or its existing loan portfolio;
d. Controls in identifying and correcting errors made by Ocwens personnel or
systems;
e. Risk management functions;
f. Contracts or proposed contracts with third parties, including but not limited to
related parties;
g. Fees charged by Ocwen to borrowers or mortgage investors; and
h. The Ocwen borrower experience.
33.
The Operations Monitor will identify the criteria for determining what constitutes
a related party for purposes of compliance with this Consent Order.

34.
The purview of the Operations Monitor will extend to all matters directly or
indirectly affecting New York borrowers, including matters that affect borrowers in all states or
in multiple states that include New York.
35.
The Operations Monitor will identify needed corrective measures to address
identified weaknesses and deficiencies in Ocwens operations, make recommendations to Ocwen

and to the Superintendent, and oversee implementation of reforms. The Operations Monitor will
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also develop benchmarks against which to assess Ocwens progress in complying with
recommended corrective measures.
36.
The Operations Monitor will review and assess Ocwens current committees of
the Board of Directors. Ocwen Financial Corporations Board of Directors (the Board) will
consult with the Operations Monitor concerning, among other things, the structure, composition,
and reporting lines of such committees, and whether certain committees should be either
disbanded or created.
37.
The Board will consult with the Operations Monitor to determine which decisions
should be committed to the specific oversight of the Boards independent directors, or a

committee comprised of such independent directors, including, but not limited to:
a. Approval of transactions with related parties;
b. Approval of transactions to acquire mortgage servicing rights, sub-servicing
rights, or otherwise to increase the number of loans serviced by Ocwen;
c. Approval of new relationships with third-party vendors;
d. Determinations as to whether Ocwens servicing, compliance, and information
technology functions are adequately staffed;
e. Determinations as to whether Ocwens servicing, compliance, and information
technology personnel are adequately trained;
f. Determinations as to whether Ocwens information technology infrastructure and
ongoing investment in information technology systems are adequate;
g. Determinations as to whether Ocwen is adequately addressing the issues
identified by the Operations Monitor and the Compliance Monitor; and
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h. Determinations as to whether Ocwen is treating borrowers fairly and is

communicating with borrowers appropriately.
38.
The Board will consult with the Operations Monitor to determine whether any
member of senior management should be terminated or whether additional officers should be

retained to achieve the goals of complying with this Consent Order, and all applicable laws,
regulations, and agreements, as well as creating a corporate culture of ethics, integrity,
compliance, and responsiveness to borrowers.
39.
Ocwen may acquire MSRs upon (a) meeting benchmarks developed by the
Operations Monitor concerning the adequacy of Ocwens onboarding process for newly acquired
MSRs and its ability to adequately service both those newly acquired MSRs and its existing loan
portfolio, and (b) the Departments approval, not to be unreasonably withheld. The Operations
Monitor will act with reasonable expedition to develop such benchmarks in consultation with
Ocwen. These benchmarks will address, at a minimum, the following:
a. The development and implementation of a satisfactory compliance plan;
b. The development and implementation of a plan to resolve record-keeping and
borrower communication issues;
c. The reasonableness of fees and expenses charged to borrowers and mortgage
investors, including those charged directly or indirectly by related parties;
d. The development and performance of a risk assessment to identify potential risks
and deficiencies in the onboarding process; and
e. The development of a written onboarding plan that addresses potential risks and
deficiencies, including testing and quality control review periodically during the
onboarding process.
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The Operations Monitor will semi-annually review and approve Ocwens
benchmark pricing and performance studies with respect to all fees or expenses charged to New
York borrowers by any related party.
41.
The Operations Monitor will oversee and ensure Ocwens implementation and
adherence to the terms of this Consent Order.

42.
Within one hundred twenty (120) days of the date of the formal engagement of
the Operations Monitor, the Operations Monitor will submit to the Parties a preliminary written
report of findings, including, to the extent the Operations Monitor has had the opportunity to
develop them, any proposed corrective measures and associated benchmarks (the Operations
Report). The Operations Monitor will submit written monthly action progress reports
(Progress Reports) to the Parties. On a quarterly basis, starting ninety (90) days from the date
of the first Operations Report, the Operations Monitor will issue an Operations Report covering
the three-month period immediately preceding.
43.
Ocwen agrees to cooperate fully with the Operations Monitor by, including but
not limited to, providing the Operations Monitor access to all relevant personnel and records
necessary on a real-time basis, including those at any overseas locations, and including
information on business decisions pertinent to the work of the Operations Monitor currently
pending or recently made by Ocwen management or its Board of Directors, to allow the
Operations Monitor to fulfill its duties.
44.
Any dispute as to the scope of the Operations Monitors authority will be resolved
by the Department in the exercise of its sole discretion after appropriate consultation with Ocwen
and/or the Operations Monitor.
45.
Ocwen will pay all reasonable and necessary costs of the Operations Monitor.
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The terms of the Operations Monitor will extend for a period of twenty-four (24)
months from the date of formal engagement which shall be no later than May 1, 2015. The
Department may, in its sole discretion, extend the engagement another twelve (12) months if the
Department determines that Ocwen has not sufficiently achieved benchmarks identified by the
Operations Monitor.
Compliance Monitor
47.
The Compliance Monitor will remain engaged for at least three (3) months from
the execution of this Consent Order. The Department may, in its sole discretion, extend the
engagement of the Compliance Monitor for a period not to exceed an additional three (3)
months.
48.
Following completion of the Compliance Monitors engagement, the Operations
Monitor may call upon the Compliance Monitor to perform work that draws on the Compliance
Monitors institutional knowledge of Ocwen.
49.
Prior to the Operations Monitors engagement and for a short transitional period
thereafter not to exceed forty-five (45) days, the Department may in its sole discretion direct the
Compliance Monitor to fill any of the roles of the Operations Monitor described in this Consent
Order.
Board of Directors
50.
Ocwen Financial Corporation will expand its Board of Directors by two
independent board members (the Additional Directors) in consultation with the Compliance
Monitor or the Operations Monitor.
51.
The Additional Directors will not own equity in any related party.
52.
Ocwens Board will contain no more than two executive directors at any time.
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Conflicts of Interest
53.
With respect to mortgage loans serviced by Ocwen, Ocwen will conduct semi-
annual benchmarking studies of pricing and performance standards with respect to all fees or
expenses charged to New York borrowers or to investors on New York property by any related
party, to determine whether the terms offered by the related party are commensurate with market
rates or, if market rates are not available, are reasonably related to actual expenses incurred by
the related party. Maximum rates for services that are established by government-sponsored
enterprises or other investors may not be presumed to be the market rate and may not substitute
for actual assessment of market rates.
54.
Ocwen will not share any common officers or employees with any related party.
55.
Ocwen will not share risk, internal audit, or vendor oversight functions with any
related party.
56.
Any Ocwen employee, officer, or director owning more than $200,000 equity
ownership in any related party will be recused from negotiating, or voting to approve a
transaction with the related party in which the employee, officer, or director has such equity
ownership, or any transaction that indirectly benefits such related party if such transaction
involves revenues or expense to Ocwen or a related party of $120,000 or more.
Management Changes
57.
Effective January 16, 2015, William Erbey will resign from his position as
Executive Chairman of Ocwen, his position as Chairman of the Board of Directors of Altisource
Portfolio, his position of Chairman of the Board of Directors of Altisource Residential
Corporation, his position of Chairman of the Board of Directors of Altisource Asset Management
Corporation, and his position of Chairman of the Board of Directors of Home Loan Servicing
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Solutions Ltd. Mr. Erbey will have no directorial, management, oversight, consulting, or any
other role at Ocwen or any related party, or at any of Ocwens or the related parties affiliates or
subsidiaries as of the date of his resignation. Effective at his resignation, Ocwens Board
members and management will not disclose to Mr. Erbey any non-public information about
Ocwen that is not available to other shareholders. In the event that Ocwen discovers a violation
of the terms of this Paragraph, Ocwen will notify the Department of the violation within three (3)
business days of discovery.
No Indemnification
58.
Neither Ocwen, nor any of its parents or affiliates will, collectively or
individually, seek or accept, directly or indirectly, reimbursement or indemnification, including,

but not limited to, payment made pursuant to any insurance policy, or from any of its parents or
affiliates, with regard to any or all of the amounts payable pursuant to this Consent Order.
Breach of Consent Order
59.
In the event that the Department believes Ocwen to be in material breach of this
Consent Order (Breach), the Department will provide written notice to Ocwen, and Ocwen
must, within ten (10) business days of receiving such notice, or on a later date if so determined in
the Departments sole discretion, appear before the Department to demonstrate that no Breach
has occurred or, to the extent pertinent, that the Breach has been cured.
60.
The parties understand and agree that Ocwens failure to make the required
showing within the designated time period will be presumptive evidence of Ocwens Breach.
Upon a finding of Breach, the Department has all the remedies available to it under the New
York Banking and Financial Services Laws and may use any evidence available to the
Department in any ensuing hearings, notices, or orders.
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Wavier of Rights
61.
The parties understand and agree that no provision of this Consent Order is
subject to review in any court or tribunal outside the Department.

Parties Bound by the Consent Order
62.
This Consent Order is binding on the Department and Ocwen, as well as Ocwens
successors and assigns that are under the Departments supervisory authority. This Consent
Order does not bind any federal or other state agency or any law enforcement authority.
63.
Except as set forth in Paragraphs 64 and 65, no further action will be taken by the
Department against Ocwen for the matters set forth in this Consent Order, provided that Ocwen
complies with the terms of the Consent Order.
64.
Nothing in this Consent Order shall excuse Ocwen from paying required
restitution to any borrowers harmed by its improper or illegal conduct, including the backdating
of letters to borrowers. To the extent a borrower entitled to restitution has received a cash
payment pursuant to this Consent Order, Ocwen may offset such payment against the restitution
owed to such borrower.
65.
Notwithstanding any other provision in this Consent Order, the Department may
undertake additional action against Ocwen for transactions or conduct that: (a) are not set forth
in this Consent Order; (b) Ocwen did not disclose to the Compliance Monitor or the Department
in connection with the Departments investigation into these matters; and (c) that the Department
and Compliance Monitor were not otherwise aware of in connection with the Departments
investigation and the work of the Compliance Monitor.
Notices
66.
All notices or communications regarding this Consent Order will be sent to:
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For the Department:

Daniel Burstein
Executive Deputy Superintendent
Real Estate Finance Division
New York State Department of Financial Services
One State Street
New York, NY 10004
For Ocwen:
Timothy M. Hayes
Executive Vice President and General Counsel
Ocwen Financial Corporation
1661 Worthington Road #100
West Palm Beach, FL 33409
Miscellaneous
67.
Each provision of this Consent Order will remain effective and enforceable until
stayed, modified, suspended, or terminated by the Department.

68.
No promise, assurance, representation, or understanding other than those
contained in this Consent Order has been made to induce any party to agree to the provisions of
the Consent Order.
IN WITNESS WHEREOF, the parties have caused this Consent Order to be signed this 22nd
day of December, 2014.
OCWEN FINANCIAL CORPORATION
NEW YORK STATE DEPARTMENT OF

FINANCIAL SERVICES
By: _______________________
RONALD FARIS
President and Chief Executive Officer
By: _______________________
BENJAMIN M. LAWSKY
Superintendent of Financial Services

By: _______________________
TIMOTHY M. HAYES
Executive Vice President
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For the Depmtment:

Daniel Burstein
Real Estate Finance Division
One State Street
New York, NY 10004
For Ocwen:
Timothy M. Hayes
Executive Vice President and General Counsel
Oewen Financial Corporation
1661 WOIthington Road #100
West Palm Beach. FL 33409
Miscellaneous
67.
Each provision o[this Consent Order will remain effective and enforceable until
stayed, modified, suspended, or terminated by the Department.

68.
No promise, assurance, representation, or understanding other than those
contained in this Consent Order has been made to induce any pmty to agree to the provisions of
the Consent Order.
IN WITNESS WHEREOF, the parties have caused this Consent Order to be signed this 19th
day of December. 2014.
OCWEN FINANCIAL CORPORATION
NEW YORK STATE DEPARTMENT OF

FINANCIAL SERVICES
By:
By:
~9-
BENc;cJ;-:A~M;oI:-;N-;:M-;-,-;:L--;A-:CW;-;;S'""'K-:::;Y-;--
RONALD FARIS
President and Chief Executive Officer
Superintendent of Financial Services
By:
TIMO:OccT"'H"'Y=M-;-,coH-;-A:CyC;;EOC,S ,-----
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For the Department:

Daniel Burstei n
Real Estate Finance Divi sion
One State Street
New York, NY 10004
For Oewen:
Timothy M. Hayes
Executi ve Vice President and General Counsel
Ocwen Financial Corporat ion
1661 Worthington Road # 100
We" Palm Beach, FL 33409
Misce ll aneous
67.
Each provision of this Consent Order will remain effective and enforceable unt il
stayed. modified, suspended. or terminated by the Department.

68.
No promi se. assurance . representation, or understanding other than those
conta ined in thi s Consent Order has been made to induce any party to agree to the prov isions of
the Consent Orde r.
IN WITNESS WI-IEREOF, the parties have caused this Consent Order to be signed thi s 19th
day of December. 2014.
OCWEN FINANCIAL CORPORATlON
NEW YORK STATE DEI'ARTMENT OF

FI NANCIAL SE RYICES
By:
RON
~~~~~R
' A L D FA ~I~~-----S
By:
li E N:,eJ'-"
AM
= IN
o,-,-:C"O".--;
M L- A
" '::-Y"'SKY
"'""-;-
Pres id en t ,lnd C hi ef Exec utive Officer
S UJlerintendent of financhll Serv ices
OCWEN LOAN SERV IC ING, LLC
BY
:-r:V 0{ ~
TIMOTHY M. HAYES
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1/29/2015
Ocwen to pay $2.5 million to settle California dispute : News
USCA Case #14-5265
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Ocwen to pay $2.5 million to settle California dispute

JANUARY 2 4 , 2 01 5 1 2 :03 PM
SACRAMENTO, Calif. (AP) Ocwen Financial Corp. is paying a $2.5 million penalty and
submitting to a review by an independent auditor to avoid losing its license to make and
service mortgages in California.
The settlement announced late Friday by California's Department of Business Oversight
stems from Ocwen's refusal to turn over records sought by state regulators as part of an
examination of its lending practices.
The standoff prompted California to initiate proceedings to suspend Ocwen's license, an
action that now will be dropped as part of the agreement.
Ocwen won't be able to take on any new customers in California until state regulators are
satisfied the Atlanta-based company will promptly respond to future demands for business
records.
Ocwen didn't immediately respond to a request Saturday for comment about the settlement.
"We're pleased this frustrating skirmish over what should have been a routine matter is
finally resolved," said Tom Dresslar, a spokesman for California's Department of Business
Oversight.
This is the second time in a month that Ocwen's alleged misconduct has cost the company.
Just before Christmas, Ocwen reached a $150 million settlement that imposed reforms on its
mortgage lending practices. The terms of that deal set aside $50 million for New York
homeowners harmed by Ocwen's alleged abuses, including bungled foreclosures. Ocwen
founder William Erbey stepped down as the company's executive chairman as part of the
New York settlement.
The company's stock has plummeted by more than 70 percent since the New York
settlement was announced. Ocwen's shares closed Friday at $6.35.
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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY
Filed: 02/01/2015
Page 1 of 1
EDMUND G. BROWN JR., Governor
DEPARTMENT OF BUSINESS OVERSIGHT

Ensuring a Fair and Secure Financial Services Marketplace for all Californians
JAN LYNN OWEN

Commissioner of Business Oversight
For Immediate Release
January 23, 2015
Contact: Tom Dresslar

(916) 327-0309
Ocwen Agrees to $2.5 Million Settlement for

Failing to Provide Loan Information
Ocwen to also pay for auditor to ensure compliance with state laws
SACRAMENTO The California Department of Business Oversight (DBO) announced a $2.5 million
settlement today with Ocwen Loan Servicing, LLC over the firms failure for more than a year to provide
loan information needed by the DBO to assess Ocwens compliance with state mortgage lending laws.
The Department is committed to supporting a fair and secure financial services marketplace for all
California consumers, said DBO Commissioner Jan Lynn Owen. This settlement allows us to move
forward and ensure that Ocwen is meeting its obligations under the law.
Under the consent order agreement, the DBO will select an independent, third-party auditor, paid for by
Ocwen, whose duties will include ensuring Ocwen provides the DBO all the information it has requested
from loan files. Ocwen also will pay $2.5 million in penalties and cover the DBOs administrative costs
associated with the case.
The settlement also prohibits Ocwen from taking on any new California customers until the DBO determines
the firm can fully respond in a timely manner to future requests for information, and the DBO will drop its
effort to suspend Ocwens license to operate in California. Filed Oct. 3, 2014, the formal accusation grew out
of Ocwens conduct during a routine regulatory examination and will now be withdrawn.
The third-party auditor will review the loan-file information. Based on the review, the auditor will submit a
report to the DBO on Ocwens compliance with the California Residential Mortgage Lending Act, the 2012
Homeowner Bill of Rights, and other state and federal laws and regulations.
Additionally, the auditor will submit a report to the Commissioner and Ocwen that assesses the firms loan
servicing procedures, processes and staffing levels. Ocwen will have to adopt an action plan to correct any
deficiencies identified by the auditor. The Commissioner must approve the action plan, and the auditor will
oversee its implementation by Ocwen.
The DBO retains the ability to pursue an enforcement action against Ocwen should the examination of the
loan files uncover substantive violations of laws designed to protect mortgage loan consumers.
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MARY ANN SMITH

Deputy Commissioner
SEAN ROONEY
Assistant Chief Counsel
ALEX M. CALERO (CA STATE BAR NO. 238389)
Corporations Counsel
CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT
1350 Front Street, Room 2034
San Diego, California 92101
Telephone: (619) 525-4044
Facsimile: (619) 525-4045
Attorneys for the Complainant
State of California - Department of Business Oversight
8
9
BEFORE THE DEPARTMENT OF BUSINESS OVERSIGHT
10
OF THE STATE OF CALIFORNIA
11
12
13
In the Matter of the Accusation of THE

COMMISSIONER OF BUSINESS
OVERSIGHT,
Complainant,
14
15
16
17
File No.: 413-0544

OAH No. 2014100930
CONSENT ORDER
vs.
OCWEN LOAN SERVICING, LLC,
Respondent.
18
19
This Consent Order is entered into between the Commissioner of Business Oversight,
20
(Commissioner), and Ocwen Loan Servicing, LLC (Ocwen) (hereinafter collectively referred to
21
as the Parties).
22
23
24
RECITALS
WHEREAS, Ocwen is a limited liability company formed and existing under the laws of the
State of Delaware and authorized to conduct business in the State of California.
25
WHEREAS, Ocwen is a residential mortgage lender and loan servicer licensed by the
26
Commissioner pursuant to the California Residential Mortgage Lending Act ("CRMLA") (Fin. Code,
27
50000 et seq.). Ocwen has its principal place of business located at 1661 Worthington Road, Suite
28
100, West Palm Beach, Florida, 33409. In California, Ocwen has a branch office located at 2255
-1CONSENT ORDER
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North Ontario Street, Suite 400, Burbank, California, 91504.
WHEREAS, the Department of Business Oversight (Department), through the
Commissioner, has jurisdiction over the licensing and regulation of entities engaged in the business
of lending and/or servicing pursuant to the CRMLA.
5
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Document #1535317
WHEREAS, Ocwen reported that in California, during 2013, it serviced more than $90 billion
in mortgage loans, for more than 350,000 borrowers and foreclosed on more than 2500 borrowers.
WHEREAS, pursuant to Financial Code section 50302, the Commissioner is required to
examine the records, documents and affairs of each licensee under the CRMLA to ensure compliance
with the law. Financial Code section 50314 requires a licensee to keep records and documents that
10
will properly enable the Commissioner to determine whether the licensee is in compliance with the
11
law.
12
WHEREAS, on or about January 8, 2013, the Commissioner commenced a routine regulatory
13
examination of Ocwen through her examination staff, to ensure Ocwens compliance with the
14
CRMLA and the California Homeowner Bill of Rights, a package of amendments to the California
15
Civil Code that became law on January 1, 2013.
16
WHEREAS, as part of the regulatory examination, the Department made reasonable requests
17
to Ocwen, including through a lawfully issued administrative subpoena duces tecum, for the
18
production of information and documents for borrower loan files. On October 15, 2013, the
19
Department made a request to Ocwen for documents and information for ten loan files. A second
20
request was made on July 31, 2014 for 1200 loan files (1200 loan sample). A third request was
21
made on August 5, 2014 for 120 loan files (120 loan sample).
22
WHEREAS, on June 16, 2014 the Department issued an Order to Discontinue Violations as a
23
result of Ocwens failure to produce requested information and documents. Ocwen did not request a
24
hearing to challenge the Order to Discontinue Violations and the Order to Discontinue Violations is
25
now final.
26
WHEREAS, on October 3, 2014, the Department issued an Order of Forfeiture, requiring
27
Ocwen to forfeit $1,000.00, which is the maximum allowed under the law, as a result of Ocwens
28
failure to meet a deadline for production of requested information and documents.

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WHEREAS, on November 26, 2014, the Department issued a second Order of Forfeiture,
requiring Ocwen to forfeit an additional $1,000.00, which is the maximum allowed under the law, as
a result of Ocwens failure to meet a subsequent deadline for production of requested information and
documents for the 120 and 1200 loan samples.
WHEREAS, due to Ocwens repeated failure to timely and fully comply with the
Commissioners requests for information and documentation, the Department initiated an action, on
October 3, 2014, to suspend Ocwens license, entitled the Commissioner of Business Oversight v.
Ocwen Loan Servicing, LLC, OAH No. 2014100930 (Accusation).
Document #1535317
10
WHEREAS, on or about October 3, 2014, Ocwen was served with the Accusation. Ocwen
timely filed a Notice of Defense with the Commissioner regarding the Accusation.
11
WHEREAS, after Ocwens filing of the Notice of Defense, Ocwens failure to timely and
12
fully comply with the Commissioners requests for information and documents for the 120 and 1200
13
loan samples continues.
14
WHEREAS, despite a California administrative law judge ordering Ocwen, on November 14,
15
2014, to produce all information and documents by December 1, 2014, Ocwen failed to produce all
16
outstanding items for the 120 and 1200 loan samples.
17
WHEREAS, on January 2, 2015, the Department issued a third Order of Forfeiture, requiring
18
Ocwen to forfeit $1,000.00 more, which is the maximum allowed under the law, as a result of
19
Ocwens failure to again meet a deadline for production of requested information and documents for
20
the 120 loan sample.
21
WHEREAS, Ocwens repeated failure to timely produce all the information and documents
22
requested by the Department has caused unnecessary delay of the Departments examination, which
23
is ongoing.
NOW, THEREFORE, the Parties are willing to resolve the matters cited herein as follows:
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TERMS AND CONDITIONS

Resolution of Current Accusation
1.
This Consent Order is entered into between the Commissioner and Ocwen to resolve
the matters set forth in the Accusation, issued on October 3, 2014. The Consent Order is entered into
for the purpose of judicial economy and expediency and to avoid the expense of a hearing and
possible further litigation.
Filed: 02/01/2015
2.
Ocwen acknowledges its right to an administrative hearing under the CRMLA in
connection with the Accusation and hereby waives that right to a hearing, and to any reconsideration,
appeal, or other rights which may be afforded pursuant to the CRMLA, the California Administrative
10
Procedure Act, the California Code of Civil Procedure, or any other provision of law in connection
11
with the matter.
12
Prohibition on Acquisition of Mortgage Servicing Rights
13
3.
Upon the effective date of this Consent Order, Ocwen will cease acquiring any
14
additional mortgage servicing rights, from any source, for loans secured by properties in California
15
until the Department is satisfied that Ocwen can satisfactorily respond to the requests for information
16
and documentation made in the course of a regulatory exam.
17
Engagement and Duties of a Third Party Auditor
18
4.
The Department will select, in its discretion, an independent third party auditor
19
(Auditor), who will report directly to the Department. Ocwen will pay all reasonable and necessary
20
costs of the Auditor, as determined by the Commissioner.
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22
5.
The Auditor will:

a.
Conduct a comprehensive review (Servicing Practices Review) to assess
23
how Ocwens servicing policies and procedures affect its ability to comply with state and federal
24
laws and regulations, including the CRMLA and California Homeowner Bill of Rights, oversee the
25
implementation of corrective measures to address deficiencies and weaknesses identified by the
26
Servicing Practices Review, and make monthly reports to the Department regarding
27
recommendations for improvement of policies and procedures, the identification of deficiencies and
28
implementation of improvements; and

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b.
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Conduct a compliance review (Compliance Review) of loan files identified
by the Commissioner to assess Ocwens compliance with state and federal laws and regulations,
including the CRMLA and California Homeowner Bill of Rights; and
c.
Within ten (10) days after the end of each calendar quarter following the
effective date of the Consent Order, submit to the Department a written progress report detailing the
form and manner of all actions taken to secure compliance with the provisions of the Consent Order
and the results thereof.
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9
Document #1535317
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6.
Within twenty (20) days of the Departments identification of the Auditor, Ocwen will
submit to the Department for approval the proposed terms of the letter of engagement with the
Auditor (Letter of Engagement).
11
7.
The term of the Auditor will initially be for a period of twenty-four (24) months from
12
the date the Letter of Engagement is approved by the Department. The Auditors term can be
13
extended in the discretion of the Department. Any dispute as to the scope of the Auditors authority
14
will be resolved by the Department, in its discretion.
15
8.
Ocwen agrees to fully cooperate with the Auditor, by, including but not limited to,
16
providing the Auditor with access to all relevant records necessary to allow the Auditor to fulfill its
17
responsibilities. Any confidential customer information provided to the Auditor by Ocwen will
18
remain the property of Ocwen and will be treated confidentially, subject to the Auditors reporting
19
requirements and an enforcement action by the Department as outlined in this Consent Order.
20
Compliance Review
21
22
9.
Ocwen agrees to produce all information and documents identified by the Department
for the Compliance Review.

10.
23
The Auditors Compliance Review will be at the direction of the Department and will
24
analyze, at a minimum, completeness of the information and documents produced and compliance
25
with state and federal laws and regulations, including the CRMLA and California Homeowner Bill of
26
Rights.
27
28
11.
On a monthly basis, the Auditor will submit to the Department a written progress
report detailing the status of the Auditors Compliance Review (Compliance Review Progress
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Report). The Auditor will submit Compliance Review Progress Reports starting thirty (30) days
after the Letter of Engagement is approved by the Department, and monthly thereafter until the
review is complete.
12.
Document #1535317
Based on a completed Compliance Review, the Auditor will submit to the Parties a
written report of the findings (Compliance Review Findings Report).
13. Nothing in this Consent Order shall preclude the Commissioner from pursuing any
examination, enforcement action or additional agreement with Ocwen relating to violations of state
and federal laws and regulations, including the CRMLA and California Homeowner Bill of Rights,
discovered during the Compliance Review or as otherwise might be found.
10
11
Servicing Practices Review

14.
The Auditors Servicing Practices Review will assess Ocwens operations with respect
12
to loans on 1-4 family unit residential property located in the State of California. The Servicing
13
Practices Review will, at a minimum, assess the following:
14
a.
The adequacy of Ocwens staffing levels and staff training in business
15
programs responsible for statutory disclosures to a borrower once a loan is delinquent, assignment of
16
a long-term single point of contact to a borrower, review of foreclosure prevention alternative
17
applications and loans in risk of delinquency, risk of default and loans in foreclosure.
18
19
b.
The sufficiency and integration of Ocwens internal systems for storing and
maintaining updated information once a borrowers loan is acquired for servicing by Ocwen.
20
c.
The effectiveness of communication between third party vendors and Ocwen
21
once a borrower has been referred for foreclosure. This analysis should include access by third parties
22
to Ocwens systems and current borrower information, including pending applications for foreclosure
23
prevention alternatives.
d.
24
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Ocwens loan servicing practices and that they enable compliance with the law.
e.
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The completeness and sufficiency of policies and procedures governing
The accuracy of borrower account information for all loans serviced by
Ocwen.
15.
Based on the Servicing Practices Review, the Auditor will within ninety (90) days of
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the Departments written approval of the Letter of Engagement, submit to the Parties a report entitled
the Servicing Practices Report which will report its findings, identify any needed corrective
measures to address weaknesses and deficiencies and make recommendations to the Commissioner.
The Auditor will oversee implementation of any recommendations approved by the Department
based on the Servicing Practices Report.
Document #1535317
16.
Within sixty (60) days of Ocwens receipt of the Servicing Practices Report, Ocwen
will submit to the Department for approval a written plan (Action Plan) designed to address and
implement corrective measures, and address any deficiencies and any other issues identified in the
Servicing Practices Report. Upon receipt of the Departments written approval of the Action Plan,
10
11
Ocwen will begin to implement the necessary changes with the oversight of the Auditor.
17.
On a monthly basis, the Auditor will submit written reports on the progress of
12
Ocwens compliance with the Servicing Practices Report and the Action Plan (Servicing Practices
13
Progress Report). The Auditor will begin providing the monthly Servicing Practices Progress
14
Reports to the Department and Ocwen thirty (30) days after the Departments approval of Ocwens
15
Action Plan.
16
18.
During the period in which the Consent Order remains in effect, any approved Action
17
Plan and the Letter of Engagement will not be amended or rescinded without the prior written
18
approval of the Department, other than amendments necessary to comply with applicable laws and
19
regulations.
20
Penalties and Costs
21
22
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19.
For its repeated failure to timely produce the information and documents requested by
the Department, Ocwen hereby agrees to pay the following:

a.
The Departments examination costs, as required pursuant to Financial Code
sections 50302, subdivision (d), and 50314, subdivision (c).

b.
A penalty in the amount of $2,500,000.00 to be paid within ten (10) days of the
26
effective date of this Consent Order and made payable to the California Department of Business
27
Oversight and sent to Alex M. Calero, Senior Corporations Counsel, 1350 Front Street, Room 2034,
28
San Diego, CA 92101.

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Notices
20.
Alex M. Calero
Senior Corporations Counsel
California Department of Business Oversight
1350 Front Street, Room 2034
San Diego, CA 92101
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Page 8 of 9
All communications regarding this Consent Order will be sent to:
General Counsel
1661 Worthington Road
9
10
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Miscellaneous Provisions
21.
The Commissioner will withdraw the Accusation within 3 business days of her
12
approval of the Letter of Engagement for the Auditor. The Department reserves its right to take any
13
enforcement action necessary should the Department determine Ocwen violated the terms of the
14
Consent Order. Any enforcement action taken for violations of this Consent Order may contain the
15
allegations included in the Accusation.
16
22.
Ocwen hereby agrees to comply with the Consent Order and any amendment thereto.
17
It is further understood that the Consent Order is binding on the Department and Ocwen, as well as
18
their successors and assigns that are within the supervision of the Department, but it specifically does
19
not bind any federal or other state agencies or any law enforcement authorities.
20
21
22
23.
No provision of the Consent Order is subject to review in any court or tribunal outside
the Department.
24.
Each provision of the Consent Order will remain effective and enforceable for an
23
initial period of twenty-four (24) months from the date hereof unless stayed, modified, terminated or
24
suspended by the Department.
25
25.
The waiver of any provision of this Consent Order shall not operate to waive any other
26
provision set forth herein, and any waiver, amendment or change to the terms of this Consent Order
27
must be in writing signed by the Parties.
28
26.
The Parties represent and warrant that each party has received independent advice
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from its attorney(s) and/or other representatives prior to entering into this Consent Order, and in
executing this Consent Order relied solely on the statements set forth herein and the advice of its own
counsel and/or representative.
27.
Ocwen enters into the Consent Order voluntarily and without coercion and
acknowledges that no promise, threats or assurances have been made by the Department or any
officer, or agent thereof, about this Consent Order.
Document #1535317
28.
The Consent Order may be executed in one or more counterparts, each of which shall
be an original but all of which, together, shall be deemed to constitute a single document. A fax
signature shall be deemed the same as an original signature.
10
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12
29.
Each signatory hereto represents and warrants that he/she possesses the necessary
capacity and authority to execute this Consent Order and bind the Parties.
30.
The Consent Order shall become effective when executed by the Commissioner or her
13
designee and will thereby be deemed a final order.
14
Dated: January 23, 2015
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JAN LYNN OWEN

Commissioner of Business Oversight
BY: __________________________________
Jan Lynn Owen, Commissioner
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BY: __________________________________
Ronald M. Faris, Authorized Signer
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APPROVED AS TO FORM:
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__________________________________
Alex M. Calero
Counsel for the Department
__________________________________
Regina J. McClendon, Locke Lord LLP
Counsel for Ocwen Loan Servicing, LLC
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SETTLEMENT AGREEMENT AND CONSENT ORDER

OCWEN FINANCIAL CORPORATION AND OCWEN LOAN SERVICING, LLC
WHEREAS, Ocwen Financial Corporation is a publicly traded Florida corporation
headquartered in Atlanta, Georgia and Ocwen Loan Servicing, LLC is a limited liability
company and wholly owned subsidiary servicing company of Ocwen Financial Corporation
located in Palm Beach, Florida (collectively, Ocwen).
WHEREAS, on or about September 1, 2011, Ocwen acquired Litton Loan Servicing, LP
(Litton), a servicer of residential mortgages and a Delaware limited partnership.
WHEREAS, on or about December 27, 2012, Ocwen acquired Homeward Residential
Holdings, Inc., including its subsidiary Homeward Residential, Inc. (together, Homeward),
which previously operated under the name American Home Mortgage Servicing, Inc., a servicer
of residential mortgages and a Delaware corporation.
WHEREAS, the [State Mortgage Regulators of the Participating States] (hereinafter
referred to as the State Mortgage Regulators) are members of the Conference of State Bank
Supervisors (CSBS) and/or American Association of Residential Mortgage Regulators
(AARMR) and have agreed to address enforcement concerns with Ocwen in a coordinated
manner, working through its Multi-State Mortgage Committee.
WHEREAS, the [Participating States] (collectively, Participating States) have agreed,
through their respective regulatory agencies to negotiate and enter into this Settlement
Agreement and Consent Order (hereinafter referred to as the Agreement). For the purpose of
this agreement, the law of the Participating States means the laws within the jurisdiction of the
Participating States.
WHEREAS, the State Mortgage Regulators and Ocwen (the Parties) enter into this
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Agreement with the understanding that the Consumer Financial Protection Bureau and
Participating States Attorneys General, as plaintiffs, have entered a Consent Judgment against
Ocwen in [Federal District Court] (the Consent Judgment) with terms and conditions that are
further outlined herein.
WHEREAS, Ocwen is licensed as a mortgage lender or servicer under the law of the
Participating States.
WHEREAS, Litton and Homeward were licensed as mortgage lenders or servicers under
the law of the Participating States prior to acquisition by Ocwen.
WHEREAS, on or about December 1, 2010, the State Mortgage Regulators
commenced a Multi-State Examination (the Multi-State Examination) of Ocwen covering
the period of December 1, 2010 to October 24, 2011, in order to determine Ocwens
compliance with applicable Federal and State laws and regulations, financial condition, and
control and supervision of the licensed servicing operation. The Multi-State Examination of
Ocwen was conducted pursuant to their respective statutory authorities, and in accordance with
the protocols established by the CSBS/AARMR Nationwide Cooperative Protocol for
Mortgage Supervision and the Nationwide Cooperative Agreement for Mortgage Supervision
dated January 15, 2008.
WHEREAS, on or about November 29, 2010, the State Mortgage Regulators
commenced an examination of Litton covering the period of January 1, 2009 to October 31,
2010, in order to determine Littons compliance with applicable Federal and State laws and
regulations, financial condition, and control and supervision of the licensed servicing
operation. The Multi-State Examination of Litton was conducted pursuant to their respective
statutory authorities, and in accordance with the protocols established by the CSBS/AARMR
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Nationwide Cooperative Protocol for Mortgage Supervision and the Nationwide Cooperative
Agreement for Mortgage Supervision dated January 15, 2008. In addition, the Florida Office of
Financial Regulation conducted an independent concurrent examination of Litton covering the
period of January 1, 2008 to December 31, 2010.
WHEREAS, on or about October 29, 2010, the State Mortgage Regulators commenced
a multi-state examination of Homeward covering the period of January 1, 2009 to November 5,
2010 in order to determine Homewards compliance with applicable Federal and State laws
and regulations, financial condition, and control and supervision of the licensed servicing
operation.
The Multi-State Examination of Homeward was conducted pursuant to their
respective statutory authorities, and in accordance with the protocols established by the
CSBS/AARMR Nationwide Cooperative Protocol for Mortgage Supervision and the
Nationwide Cooperative Agreement for Mortgage Supervision dated January 15, 2008. In
addition, the Florida Office of Financial Regulation conducted an independent concurrent
examination of Homeward covering the period of January 1, 2008 to December 31, 2010.
WHEREAS, reports of examination were issued pursuant to the Multi-State
Examinations of Ocwen, Litton, and Homeward and the independent concurrent examinations
of Litton and Homeward by the Florida Office of Financial Regulation (collectively, the
Reports of Examination). Ocwen, Litton, and Homeward subsequently responded to the
Reports of Examination as required by the State Mortgage Regulators.
WHEREAS, Ocwen acknowledges that it has full knowledge of its rights to notice and
hearing pursuant to the law of the Participating States.
WHEREAS, Ocwen enters into this Agreement solely for the purpose of resolving
disputes with the State Mortgage Regulators concerning their findings as communicated in the
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Reports of Examination in their entirety and without admitting any allegations or implications
of fact, and without admitting any violations of applicable laws, regulations, or rules governing
the conduct and operation of its mortgage servicing business. Ocwen acknowledges that the
State Mortgage Regulators have and maintain jurisdiction over the underlying dispute and
subsequent authority to fully resolve the matter.
WHEREAS, the intention of the State Mortgage Regulators in effecting this settlement
is to remediate harms resulting from the alleged unlawful conduct of Ocwen, Litton, and
Homeward identified in the Reports of Examination and related inquiries and investigations
undertaken by the State Mortgage Regulators in the course of supervision.
EXAMINATION FINDINGS
WHEREAS, Examination Findings means Reports of Examination and related
inquiries and investigations by the State Mortgage Regulators that identified practices that may
otherwise violate the laws and regulations of the Participating States and related Federal law,
including but not limited to the allegations and Releases that are the basis of the Consent
Judgment and specifically including:
a. Lack of controls related to document execution, including evidence of robo-signing,
unauthorized execution, assignment backdating, improper certification and
notarization, chain of title irregularities, and other related practices affecting the
integrity of documents relied upon in the foreclosure process;
b. Deficiencies in loss mitigation and loan modification processes, including but not
limited to:
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Failure to effectively communicate with borrowers regarding loss mitigation

and other foreclosure avoidance alternatives;
2.
Failure to account for documents submitted in tandem with application for loss
mitigation assistance;
3.
Lack of reasonable expedience in approving or denying loss mitigation

applications;
4.
Providing false or misleading reasons for denial of loan modifications; and
5.
Failure to honor the terms loan modifications for transferred accounts and
continued efforts to collect payments under the original note terms.
c. Lack of controls related to general borrower account management, including but not
limited to:
1.
Misapplication of borrower payments;
2.
Inaccurate escrow accounting and statements; and
3.
Assessment of unauthorized fees and charges.
d. Inadequate staffing and lack of internal controls related to customer service;

e. Deficiencies in control and oversight of third-party providers, including but not
limited to, local foreclosure counsel;
f. Deficiencies in document maintenance processes, including but not limited to, failure
to produce documents requested in tandem with examinations; and
g. Deficiencies in management control and supervision necessary to ensure compliance
with applicable laws and regulations.
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AGREEMENT OBLIGATIONS
1. Consent Judgment. This Agreement incorporates the Consent Judgment as entered in
[Federal District Court] in the matter brought against Ocwen by the Consumer Financial
Protection Bureau and Participating State Attorneys General, as plaintiffs. The Consent
Judgment, including all of its exhibits, are fully integrated into this Agreement and
appended hereto, and the Consent Judgment, along with its exhibits, set forth the terms
and conditions applicable to Ocwen and the State Mortgage Regulators, apart from and
supplemented by the terms and conditions in this Agreement. To the extent that the terms
and conditions contained in this Agreement conflict with any provisions of the Consent
Judgment or its exhibits, the terms and conditions of this Agreement shall control.
2. Servicing Standards, Cash Payments, and Other Consumer Relief. Ocwen shall comply
with the following servicing standards, payment obligations, and other consumer relief:
a. Servicing Standards. Ocwen shall comply with the Servicing Standards set forth
in Exhibit A of the Consent Judgment.
b. Payments to Foreclosed Borrowers. Ocwen shall pay or cause to be paid the sum
of $125 million (the Borrower Payment Amount) pursuant to the terms of the
Consent Judgment and Exhibit B into an interest bearing escrow account to
provide cash payments to borrowers whose homes were sold in a foreclosure sale
between and including January 1, 2009 and December 31, 2012 and who
otherwise meet criteria set forth by the Monitoring Committee as set forth in the
Consent Judgment. This payment obligation shall be satisfied through payment
under the Consent Judgment.
c. Other Consumer Relief. Ocwen shall provide $2 billion of relief pursuant to the
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Consent Judgment and Exhibit C to consumers who meet the eligibility criteria in
the forms and amounts described under the Consent Judgment to remediate harm
to consumers caused by the alleged unlawful conduct of Ocwen, Litton, and
Homeward.
MONITORING AND ENFORCEMENT

3. No Restriction on Existing Examination and Investigative Authority. This Agreement
shall in no way preclude the State Mortgage Regulators from exercising their
examination or investigative authority authorized under the law of the Participating
States; however, retention of examination and investigative authority shall not be
construed as affecting the scope of the release in Paragraph 8 of this Agreement.
Retention of examination and investigative authority shall not be construed as affecting
or limiting the terms or conditions set forth in Paragraph 5 of this Agreement for bringing
an enforcement action for a violation of this Agreement or the Consent Judgment.
4. Sharing of Information and Cooperation.
The State Mortgage Regulators may
collectively or individually request and receive any information or documents in the

possession of the Administration and Monitoring Committee (the Monitoring
Committee) established under the Consent Judgment subject to the procedural
safeguards for documents designated as CONFIDENTIAL as set forth in Paragraph F
of Exhibit D. This Agreement shall not limit Ocwen's obligations, as a licensee of the
State Mortgage Regulators, to cooperate with any examination or investigation, including
but not limited to, any obligation to timely provide requested information or documents
to the State Mortgage Regulators upon request.
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5. Reserved Enforcement Authority. Any failure to comply with the terms and conditions of
this Agreement shall be treated as a violation of an Order of the State Mortgage
Regulators and may be enforced as such pursuant to the laws of the Participating States
subject to the terms and conditions set forth in this paragraph. The State Mortgage
Regulators, collectively or individually, may take any administrative enforcement action
authorized under the law of the Participating States. In the course of any such action, the
State Mortgage Regulators may admit into evidence Monitor Report(s) and Quarterly
Report(s). Such admissibility shall not prejudice Ocwens right and ability to challenge
the findings and/or the statements in the Monitor Report as flawed, lacking in probative
value or otherwise. The Monitor Report with respect to a particular Potential Violation
shall not be admissible or used for any purpose if Ocwen cures the Potential Violation
pursuant to Section E of Exhibit D of the Consent Judgment.
In addition, unless
immediate action is necessary in order to prevent irreparable and immediate harm, prior
to commencing any action the State Mortgage Regulators shall provide notice to the
Monitoring Committee of its intent to bring an action as set forth in paragraph I(2) of
Exhibit D of the Consent Judgment. As set forth in Exhibit D, upon notice, the members
of the Monitoring Committee shall have no more than 21 days to determine whether to
bring an enforcement action. If the members of the Monitoring Committee decline to
bring an enforcement action, the State Mortgage Regulator must wait 21 additional days
after such a determination by the members of the Monitoring Committee before
commencing an enforcement action. Subject to the notification requirements set forth
above, the State Mortgage Regulators, as licensing authority for Ocwen, may pursue
violations of this Agreement independently of the Consumer Financial Protection Bureau
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and Participating State Attorneys General, plaintiffs to the Consent Judgment. In the
event of an action to enforce the obligations of Ocwen and to seek remedies for an
uncured Potential Violation for which Ocwen's time to cure has expired, the State
Mortgage Regulators sole relief available in such an action will be the forms of relief set
forth in Paragraph I(3) of Exhibit D to the Consent Judgment. The State Mortgage
Regulators shall not initiate an enforcement action if barred by the release in Paragraph 8
of this Agreement. In the event a Potential Violation, as defined in Exhibit D to the
Consent Judgment, is cured as provided in Paragraph E of Exhibit D, then no State
Mortgage Regulator shall have any remedy under this Agreement or the Consent
Judgment (other than the remedies in Paragraph E(5) of Exhibit D) with respect to such
Potential Violation.
GENERAL PROVISIONS
6. Consent. Ocwen hereby knowingly, willingly, voluntarily, and irrevocably consents to
the execution of this Agreement pursuant to the authority of the State Mortgage
Regulators and agrees that it understands all of the terms and conditions contained herein.
By voluntarily entering into this Agreement, Ocwen waives any right to administrative
hearing, administrative review of a hearing, or appeal concerning the terms, conditions,
and related obligations set forth in this Agreement.
7. Effectiveness. This Agreement shall become effective upon entry of the Consent
Judgment and execution of by all of the named State Mortgage Regulators (the Effective
Date).
8. Release. Upon payment of the Borrower Payment Amount, the State Mortgage
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Regulators shall individually and collectively release and forever discharge Ocwen,
Litton, and Homeward from any administrative enforcement actions pertaining to or
relating to the practices identified herein as Examination Findings that occurred between
January 1, 2009 and December 31, 2012 (the Release Period). This release shall not
otherwise preclude or impair the State Mortgage Regulators from taking enforcement
action for any other violations of law not released herein, even if such other violations
fall within the Release Period
9. Related Parties. The Release set forth under Paragraph 8 shall extend to all parties liable
for the Examination Findings of Ocwen, Litton, and Homeward, which are the basis of
this Agreement, which parties are otherwise subject to the jurisdiction of the State
Mortgage Regulators, exclusively in their capacity as mortgage licensing authorities, for
any violation under the laws or regulations of the Participating States and related Federal
law arising from Examination Findings.
10. Fees Assessed to Consumers Not Subject to Release. Any fee assessed to a consumer by
Ocwen, Litton, or Homeward, which is later determined to have been specifically
prohibited by the laws of the Participating States remains unauthorized and is not
otherwise affected by the terms of the Release as set forth under Paragraph 8. As such,
claims against Ocwen for reimbursement to mortgage borrowers are not released by this
Agreement. Nothing in this Agreement, however, shall require the reimbursement of
fees duplicative of any prior voluntary or involuntary payment to the affected borrower,
whether directly or indirectly, from any governmental program or other source.
11. Standing and Choice of Law. Each State Mortgage Regulator has standing to enforce
this Agreement in the judicial or administrative process otherwise authorized under the
10
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Laws of the Participating State. Upon entry, this Agreement shall be deemed a final
order of the State Mortgage Regulators unless adoption of a subsequent order is
necessary under the laws of the Participating States. In the event of any disagreement
between any State Mortgage Regulator and Ocwen regarding the enforceability or
interpretation of this agreement and compliance therewith, the courts or administrative
agency authorized under the laws of the Participating State shall have exclusive
jurisdiction over the dispute, and the laws of the Participating State shall govern the
interpretation, construction, and enforceability of this Agreement.
12. Adoption of Subsequent Orders to Incorporate Terms. Ocwen consents to the issuance by
each State Mortgage Regulator, if deemed necessary under the law of the Participating
States by the State Mortgage Regulator, of a separate administrative order to adopt and
incorporate the terms and conditions of this Agreement. Ocwen hereby waives review
and approval of any such subsequent orders prior to entry provided the subsequent order
does not amend, alter, or otherwise change the terms of the Agreement. In the event a
subsequent order amends, alters, or otherwise changes the terms of the Agreement, the
terms of the Agreement as set forth herein will control.
13. Attorneys Fees. Ocwen waives and shall not assert any claim for fees, costs or expenses
against the State Mortgage Regulators, or any of their agents or employees, related in any
way to this enforcement matter or the Consent Judgment or Settlement Agreement and
Consent Order, whether arising under common law or under the terms of any statute; for
these purposes, the Parties agree that neither Ocwen nor the State Mortgage Regulators
are the prevailing party in this action because the Parties have reached a good faith
settlement.
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WHEREFORE, in consideration of the foregoing, including the recital paragraphs, the

State Mortgage Regulators and Ocwen intending to be legally bound do hereby execute this
Agreement.
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1 Daniel Alberstone (SBN 105275)

dalberstone@baronbudd.com
2 Roland Tellis (SBN 186269)
rtellis@baronbudd.com
3 Mark Pifko (SBN 228412)
mpifko@baronbudd.com
4 Michael Isaac Miller (SBN 266459)
5 imiller@baronbudd.com
BARON & BUDD, P.C.
6 15910 Ventura Boulevard, Suite 1600
Encino, California 91436
7 Telephone: (818) 839-2333
8 Facsimile: (818) 986-9698
9 Additional Counsel Identified Below
10 Attorneys for Plaintiff
DAVID WEINER, individually, and on
11 behalf of other members of the public
12 similarly situated
13
14
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA
15
Case Number:
CLASS ACTION COMPLAINT FOR:
(1) Violations of Californias Unfair
Competition Law (Cal. Bus. & Prof.
18
Plaintiff,
Code 17200 et seq.);
vs.
(2) Violations of the Racketeer
19
Influenced and Corrupt Organizations
20 OCWEN FINANCIAL CORPORATION,
Act (18 U.S.C. 1962(c));
a Florida corporation, and OCWEN LOAN
SERVICING,
LLC,
a
Delaware
limited
21
(3) Violations of the Racketeer
liability company,
Influenced and Corrupt Organizations
22
Act (18 U.S.C. 1962(d));
Defendants.
23
(4) Violations of the Rosenthal fair Debt
Collection Practices Act (Cal. Civ.
24
Code 1788, et seq.);
25
(5) Unjust Enrichment
26
(6) Fraud; and
(7) Breach of Contract
27
Jury Trial Demanded
28
16 DAVID WEINER, individually, and on
behalf of other members of the public
17 similarly situated,
28
30
CLASS ACTION COMPLAINT
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For his complaint against Ocwen Financial Corporation (OFC) and Ocwen Loan
2 Servicing, LLC (OLS) (collectively Ocwen or Defendants), Plaintiff David

3 Weiner (Plaintiff), individually, and on behalf of all other members of the public
4 similarly situated, based on information and belief, alleges as follows:
5
6
NATURE OF THE ACTION

1.
This case concerns fraudulent practices committed by Ocwen in connection
7 with its home mortgage loan servicing business. Taking advantage of the economic
8 downturn and the increasing number of loans in default, Ocwen devised a scheme to
9 deceive homeowners who are behind on their mortgage payments into paying, or
10 believing they have to pay, hundreds or thousands of dollars in unlawfully marked-up
11 fees.
12
2.
Ocwen uses an enterprise of affiliated companies, including Altisource
13 Portfolio Solutions S.A. (Altisource) -- a wholly-owned subsidiary of OFC until 2009,

14 when it was spun-off into a separate company -- to engage in its scheme to disguise
15 hidden, marked-up fees so that it could earn additional, undisclosed profits. Through this
16 unlawful enterprise, Ocwen assesses homeowners fees for services performed by vendors,
17 which are unlawfully marked up, often by 100% or more.
18
3.
More specifically, when home mortgage borrowers get behind on their
19 payments and go into default, Ocwen obtains a number of default-related services

20 which purportedly are designed to protect the lenders interest in the property. To obtain
21 these services, Ocwen funnels the work through its affiliated company, Altisource, who
22 then orders these services using a network of third-party vendors. As a matter of practice,
23 Altisource marks up the third-party vendors actual cost for their services, and then,
24 passes along the marked-up charge to Ocwen. Without disclosing the mark-up, Ocwen, in
25 turn, assesses the marked-up fees for these default-related service on homeowners
26 accounts.
27
4.
Ocwen is well-aware that its marked-up fees violate the disclosures made in
28 homeowners mortgage contracts because the fees exceed the actual cost of the default28
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related services, so when Ocwen collects, or attempts to collect, such fees, it is not merely
being paid back, or collecting amounts disbursed, nor are such fees reasonable and
appropriate to protect the note holders interest in the property and rights under the deed
of trust. Nevertheless, through this fraudulent scheme, Ocwen is able to quietly profit
from default-related service fees at the expense of distressed homeowners -- a particularly
vulnerable class of consumers who are struggling to keep their homes.
5.
Ocwens fraudulent loan servicing practices are designed to avoid detection,
even when examined in bankruptcy proceedings. As one court has explained, [l]enders
have apparently been operating under the assumption that the fees and costs in their
10
proofs of claim are invulnerable to challenge because debtors lack the sophistication, the
11
debtors bar lacks the financial motivation, and bankruptcy courts lack the time. . . .[T]he
12
Court believes that certain members of the mortgage industry are intentionally attempting
13
to game the system by requesting undocumented and potentially excessive fees.1
14
6.
This type of rampant abuse by mortgage servicers like Ocwen has led federal
15
regulators to enter into numerous consent orders, but according to Mark Pearce, Director,
16
Division of Depositor and Consumer Protection, Federal Deposit Insurance Corporation:2
17
18
19
20
21
22
23
In re: Prevo, 394 B.R. 847, 848, 851 (Bankr. S.D. Tex. 2008) (emphasis added).
28
See Mark Pearce, Director, Division of Depositor and Consumer Protection, Federal
Deposit Insurance Corporation, Mortgage Servicing: An Examination of the Role of
Federal Regulators in Settlement Negotiations and the Future of Mortgage Servicing
Standards, before the Subcommittees on Financial Institutions and Consumer Credit, and
Oversight and Investigations Committee on Financial Services, U.S. House of
Representatives, July 7, 2011, available at
http://financialservices.house.gov/UploadedFiles/070711pearce.pdf (last visited, Feb. 1,
2012).
27
24
25
26
27
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these consent orders do not fully identify and remedy past errors
in mortgage-servicing operations of large institutions; in fact,
the scope of the interagency review did not include a review of
. . . the fees charged in the servicing process. Much work
remains to identify and correct past errors and to ensure that the
servicing process functions effectively, efficiently, and fairly
going forward.
1
2
3
4
5
6
7
8
9
10
7.
In addition to marking up fees for default-related services, Ocwen also has a
policy, practice, and procedure of misapplying homeowners payments, which, in turn,

generates fee income and larger profits for Ocwen and its affiliates.
8.
Plaintiff brings this action, seeking injunctive relief and damages on behalf of
himself and the thousands of other homeowners who have been victimized by Ocwens
uniform scheme.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
JURISDICTION AND VENUE

9.
Jurisdiction is proper in this Court under 28 U.S.C. 1332(d)(2). The matter
in controversy, exclusive of interest and costs, exceeds the sum or value of $5,000,000
and is a class action in which members of the class of plaintiffs are citizens of states
different from Defendants. Further, greater than two-thirds of the members of the Class
reside in states other than the states in which Defendants are citizens.
10.
This Court also has jurisdiction over this matter under 28 U.S.C. 1331,
1961, 1962 and 1964. This Court has personal jurisdiction over Defendants under 18
U.S.C. 1965. In addition, under 28 U.S.C. 1367, this Court may exercise supplemental
jurisdiction over the state law claims because all of the claims are derived from a common
nucleus of operative facts and are such that Plaintiff ordinarily would expect to try them in
one judicial proceeding.
11.
Venue lies within this judicial district under 28 U.S.C. 1391(b)(1) and
(c)(2) because Defendants contacts are sufficient to subject them to personal jurisdiction
in this District, and therefore, Defendants reside in this District for purposes of venue, or
under 28 U.S.C. 1391(b)(2) because certain acts giving rise to the claims at issue in this
Complaint occurred, among other places, in this District.
28
27
28
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PARTIES
12.
Plaintiff David Weiner is an individual and a citizen of California.
13.
Defendant Ocwen Financial Corporation is a corporation organized under the
4
5
laws of Florida, with its principal place of business in Atlanta, Georgia.

14.
Defendant Ocwen Loan Servicing, LLC is Delaware limited liability
company, and an indirect wholly-owned subsidiary of Ocwen Financial Corporation.
Ocwen Loan Servicing, LLC maintains operations in this District related to the activities
at issue in this case, including operations concerning the management of loans that are in
default, which are conducted from offices located in Burbank, California. Ocwen Loan
10
Servicing, LLCs headquarters are located in West Palm Beach, Florida. It is licensed to
11
service mortgage loans in all fifty states, including California, the District of Columbia,
12
and two U.S. territories.
13
15.
Whenever, in this Complaint, reference is made to any act, deed, or conduct
14
of Defendants committed in connection with the enterprise, the allegation means that
15
Defendants engaged in the act, deed, or conduct by or through one or more of their
16
officers, directors, agents, employees or representatives, each of whom was actively
17
engaged in the management, direction, control or transaction of the ordinary business and
18
affairs of Defendants and the enterprise.
19
16.
Plaintiff is informed and believes, and based thereon, alleges that, at all
20
material times herein, each of the Defendants was the agent, servant, or employee of the
21
other Defendants, and acted within the purpose, scope, and course of said agency, service,
22
or employment, and with the express or implied knowledge, permission, and consent of
23
the other Defendants, and ratified and approved the acts of the other Defendants.
24
17.
Defendants are the ultimate recipient of the ill-gotten gains described herein.
25
The fraudulent scheme at issue in this case was organized by executives working at the
26
highest levels of Defendants respective companies, and carried out by both executives
27
and subordinate employees working for Defendants.
28
FACTUAL BACKGROUND
27
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Americas Lending Industry Has Divorced itself

from the Borrowers it Once Served
1
2
3
4
18.
Ocwens unlawful loan servicing practices exemplify how Americas lending
industry has run off the rails.

19.
Traditionally, when people wanted to borrow money, they went to a bank or
a savings and loan. Banks loaned money and homeowners promised to repay the bank,
with interest, over a specific period of time. The originating bank kept the loan on its
balance sheet, and serviced the loan -- processing payments, and sending out applicable
notices and other information -- until the loan was repaid. The originating bank had a
financial interest in ensuring that the borrower was able to repay the loan.
10
20.
Today, however, the process has changed. Mortgages are now packaged,
11
bundled, and sold to investors on Wall Street through what is referred to in the financial
12
industry as mortgage backed securities or MBS. This process is called securitization.
13
Securitization of mortgage loans provides financial institutions with the benefit of
14
immediately being able to recover the amounts loaned. It also effectively eliminates the
15
financial institutions risk from potential default. But, by eliminating the risk of default,
16
mortgage backed securities have disassociated the lending community from homeowners.
17
21.
Numerous unexpected consequences have resulted from the divide between
18
lenders and homeowners. Among other things, securitization has led to the development
19
of an industry of companies which make money primarily through servicing mortgages
20
for the hedge funds and investment houses who own the loans.
21
22.
Loan servicers do not profit directly from interest payments made by
22
homeowners. Instead, these companies are paid a set fee for their loan administration
23
services. Servicing fees are usually earned as a percentage of the unpaid principal balance
24
of the mortgages that are being serviced. A typical servicing fee is approximately 0.50%
25
per year.
26
23.
Additionally, under pooling and servicing agreements (PSAs) with
27
investors and noteholders, loan servicers assess fees on borrowers accounts for default-
28
related services. These fees include, inter alia, Brokers Price Opinion (BPO) fees,
27
28
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appraisal fees, and title examination fees.
24.
Under this arrangement, a loan servicers primary concern is not ensuring
that homeowners stay current on their loans. Instead, they are focused on minimizing any
costs that would reduce profit from the set servicing fee, and generating as much revenue
as possible from fees assessed against the mortgage accounts they service. As such, their
business model . . . encourages them to cut costs wherever possible, even if [that]
involves cutting corners on legal requirements, and to lard on junk fees and in-sourced
expenses at inflated prices.3
9
10
25.
As one Member of the Board of Governors of the Federal Reserve System
has explained:
While an investors financial interests are tied more or less
directly to the performance of a loan, the interests of a thirdparty servicer are tied to it only indirectly, at best. The servicer
makes money, to oversimplify it a bit, by maximizing fees
earned and minimizing expenses while performing the actions
spelled out in its contract with the investor. . . . The broad grant
of delegated authority that servicers enjoy under pooling and
servicing agreements (PSAs), combined with an effective lack
of choice on the part of consumers, creates an environment ripe
for abuse.4
11
12
13
14
15
16
17
Ocwens Subprime Mortgage Servicing Business Grows Rapidly, and

Draws the Attention of Regulators
18
26.
19
Seeking to capitalize on these circumstances, Ocwen has positioned itself as
a major player in the residential mortgage servicing industry. In fact, Ocwen was the
20
21
22
23
24
25
See Adam J. Levitin, Robo-Singing, Chain of Title, Loss Mitigation, and Other Issues in
Mortgage Servicing, before the House Financial Services Committee, Subcommittee on
Housing and Community Opportunity, Nov. 18, 2010, available at
http://financialservices.house.gov/Media/file/hearings/111/Levitin111810.pdf (last visited
Feb. 1, 2012).
4
28
See Sarah Bloom Raskin, Member Board of Governors of the Federal Reserve System,
Remarks at the National Consumer Law Centers Consumer Rights Litigation Conference,
Boston Massachusetts, Nov. 12, 2010, available at
www.federalreserve.gov/newsevents/speech/raskin20101112a.htm (last visited Jan. 23,
2012).
27
26
27
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fourth largest mortgage servicer in the United States in 2013, collecting payments on
nearly one out of every twenty home loans.5
27.
As larger banks have shifted their attention to servicing the mortgage loans of
their core customers -- i.e., prime loan borrowers who use their lending banks other
services -- Ocwen has focused on servicing loans obtained by non-prime, or credit
impaired, borrowers.
7
8
28.
Elaborating on the tremendous growth in its servicing business in recent
years, Ocwen states:

Our residential servicing portfolio has grown from 351,595
residential loans with an aggregate [unpaid principal balance
(UPB)] of $50.0 billion at December 31, 2009, to 2,861,918
residential loans with an aggregate UPB of $464.7 billion at
December 31, 2013. Through acquisitions, we have substantially
increased the share of our servicing portfolio that is made up of
conventional (loans conforming to the underwriting standards of
the government sponsored entities, the Federal National
Mortgage Association (Fannie Mae) or the Federal Home Loan
Mortgage Corporation (Freddie Mac) (collectively, the GSEs
and Agency), government insured (loans insured by the Federal
Housing Authority (FHA) of the Department of Housing and
Urban Development (HUD) or Department of Veterans Affairs
(VA) (collectively, government insured)) and prime non-Agency
loans (loans generally conforming to the underwriting standards
of the GSEs whose UPB exceeds the GSE loan limits,
commonly referred to as jumbo loans). At December 31, 2013,
these loans comprise 56.8% of the UPB of our servicing
portfolio, up from 24.4% at December 31, 2012.6
9
10
11
12
13
14
15
16
17
18
19
20
29.
21
Ocwen goes on to explain that [t]he mortgaged properties securing the
residential loans that [they] service are geographically dispersed throughout all 50 states,
22
23
24
25
26
See Karen Freifeld, Peter Rudegeair, and Andrew Hay, NY regulator suspects Ocwen
Financial of possible self-dealing, Reuters, Apr. 21, 2014, available at
http://www.reuters.com/article/2014/04/21/ocwen-financial-letteridUSL2N0ND0R120140421 (last visited, Nov. 5, 2014).
6
28
Ocwen Financial Corp, SEC FORM 10-K (Period Ending Dec. 31, 2013), available at
http://www.sec.gov/Archives/edgar/data/873860/000144530514000799/a2013123110k.ht
m (last visited April 1, 2014).
27
27
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the District of Columbia and two U.S. territories.7 The five largest concentrations of
properties, comprising approximately 39% of the loans serviced by Ocwen as of
December 31, 2013, are located in California, Florida, New York, Texas and New
Jersey.8 California has the largest concentration with 436,374 loans, approximately 15%
of the total number of loans serviced.9
30.
Fueled by these increases in its residential servicing portfolio, Ocwens
revenue has jumped from $360 million in 2010 to a staggering $2 billion in 2013.10
7
8
31.
Ocwens rapid growth and business practices have not gone unnoticed by
state regulators, including Benjamin Lawsky, Superintendent of New Yorks Department
10
of Financial Services (the Department). As a result of a consent order entered into by
11
Lawskys office and Ocwen in late 2012, a compliance monitor was installed at Ocwen in
12
2013.11 Additionally, on or around February 6, 2014, Lawsky halted indefinitely Wells
13
Fargos transfer of approximately $39 billion in servicing rights to Ocwen. 12
14
32.
Speaking at the annual meeting of the New York Bankers Association in
15
February 2014, Lawsky cautioned that Ocwens explosive growth raises red flags, that
16
he sees corners being cut by non-bank servicers like Ocwen, and that Ocwens use of
17
18
19
20
Id.
Id.
21
Id.
22
10
23
24
25
26
27
28
27
28
James Sterngold and Saabira Chaudhuri, Ocwen to Restate Results After Accounting
Change, The Wall Street Journal, August 12, 2014, available at
http://online.wsj.com/articles/ocwen-financial-to-restate-some-results-1407852143 (last
visited, Nov. 5, 2014).
11
Michael Corkery, State Regulator Halts Deal Between Wells Fargo and Loan Servicer,
N.Y. Times, February 6, 2014, available at http://dealbook.nytimes.com/2014/02/06/newyork-regulator-halts-mortgage-servicing-rights-deal/?_php=true&_type=blogs&_r=0 (last
visited, Nov. 5, 2014).
12
Id.
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technology to handle distressed loans is too good to be true.13
33.
Such concerns about Ocwens loan servicing practices are well-founded. For
companies like Ocwen, who are determined to maximize the money they earn from
servicing loans, the right to charge default-related service fees has opened the door to a
world of exploitation.
34.
Taking full advantage of this opportunity for such explotation, Ocwen
formed an unlawful enterprise of affiliated companies, including Altisource, in order to
increase mortgage servicing revenues by fraudulently concealing marked-up fees for
default-related services on homeowners accounts.

Ocwens Tangled Web Of Conflicts and Self-Dealing
with Affiliated Company Altisource
10
11
35.
12
13
14
15
millions of loans it services to computer software programs. The software programs are
designed to manage homeowners loan accounts and assess fees, according to protocols
and policies designed by the executives at Ocwen.
36.
16
17
18
19
20
21
22
To maximize profits, Ocwen assigns the complex task of administering the
Prior to August 2009, Ocwens technology platforms were provided by the
Ocwen Solutions line of businesses, which consisted primarily of Ocwens former

unsecured collections and its residential fee-based loan processing businesses. These
businesses provided technological services across the full spectrum of the mortgage
lifecycle, from due diligence and underwriting to default processing and property
preservation, all the way up to collections and customer relationship management. OFC
developed this technology platform over a period of more than 20 years at a cost of more
23
24
25
13
28
Kate Berry, Lawsky Bashes Ocwen, Says Servicers Growth Raises Red Flags,
National Mortgage News, February 12, 2014, available at
http://www.nationalmortgagenews.com/mortgage-servicing/lawsky-bashes-ocwen-saysservicers-growth-raises-red-flags-1041092-1.html?zkPrintable=true (last visited, Nov. 5,
2014).
27
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than $150 million.14
37.
In order to allow Ocwen to focus on growing its core servicing business, on
August 10, 2009, Ocwen completed the distribution of the Ocwen Solutions line of
businesses via the spin-off of Altisource.15 As part of the separation, William C. Erbey --
Ocwens Chairman of the Board and the owner of 13% of Ocwens common stock -- also
became the Chairman of the Board for Altisource.16
38.
As of June 30, 2014, Mr. Erbey owns approximately 27% of the common
stock of Altisource.17 He also has taken a very active role in the company. As Altisource
explains in its Form 10-K Statement, its success is dependent upon Mr. Erbeys
10
services, and the loss of his services could have a material adverse effect upon business,
11
operating results and financial conditions.18
12
13
39.
its relationship with Ocwen as a potential risk factor to its business:
14
Given this close and continuing relationship with Ocwen, we

may encounter difficulties in obtaining and retaining other
customers who compete with Ocwen. Should these and other
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27
28
In fact, Ocwen and Altisource are so interconnected, that Altisource points to
14
Ocwen Financial Corp, SEC FORM 10-K (Period Ending Dec. 31, 2012), available at
http://www.sec.gov/Archives/edgar/data/873860/000101905613000314/ocn_10k12a.htm
(last visited Sept. 9, 2013).
15
Altisource was originally incorporated on November 4, 1999 in Luxembourg as Ocwen

Luxembourg S. r.l. See Altisource Portfolio Solutions S.A., SEC FORM 10-K (Period
Ending Dec. 31, 2012), available at http://www.sec.gov/Archives/edgar/data/1462418/
000110465913009969/a13-2839_110k.htm (last visited Sept. 9, 2013). The entity was
renamed Altisource Portfolio Solutions S. r.l. on May 12, 2009, and converted into
Altisource on June 5, 2009. Id. Prior to August 10, 2009, Altisource was a wholly-owned
subsidiary of Ocwen. Id.
16
Id.
17
Ocwen Financial Corp., SEC Form 10-Q (Period Ending June 30, 2014), available at
http://www.housingwire.com/ext/resources/files/Editorial/Documents/SEC-ABEA6F4AAO-873860-14-16.pdf (last visited October 23, 2014).
18
See Altisource Portfolio Solutions S.A., SEC FORM 10-K (Period Ending Dec. 31,
2012), available at http://www.sec.gov/Archives/edgar/data/1462418/
000110465913009969/a13-2839_110k.htm (last visited Sept. 9, 2013).
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potential customers continue to view Altisource as part of

Ocwen or as too closely related to or dependent upon Ocwen,
they may be unwilling to utilize [Altisources] services, and
[Altisources] growth could be inhibited as a result.19
1
2
3
4
40.
This close and continuing relationship between Ocwen and Altisource was
the subject of a letter Benjamin Lawsky, New Yorks top bank regulator, sent to Ocwen
on February 26, 2014. In the letter, Lawsky addressed potential conflicts of interest
between Ocwen and Altisource:
14
The Departments ongoing review of Ocwens mortgage

servicing practices has uncovered a number of potential
conflicts of interest between Ocwen and other public companies
with which Ocwen is closely affiliated. Indeed, the facts our
review has uncovered to date cast serious doubts on recent
public statements made by the company that Ocwen has a
strictly arms-length business relationship with those
companies. We are also concerned that this tangled web of
conflicts could create incentives that harm borrowers and push
homeowners unduly into foreclosure.
15
...
16
Pursuant to the December 4, 2012 Consent Order between

Ocwen and the Department, we have engaged an independent
on-site compliance monitor at Ocwen to conduct a
comprehensive review of Ocwens servicing operations. It is in
the course of the monitorship that we uncovered these potential
conflicts between and among Ocwen, Altisource Portfolio
Solutions, S.A. (Altisource Portfolio), Altisource Residential
Corporation, Altisource Asset Management Corporation, and
Home Loan Servicing Solutions Ltd. (together, the affiliated
companies), all of which are chaired by William C. Erbey, who
is also the largest shareholder of each and the Executive
Chairman of Ocwen.20
8
9
10
11
12
13
17
18
19
20
21
22
23
24
25
19
26
20
27
28
27
28
Id.
Letter from Benjamin M. Lawsky, Superintendent of Financial Services, New York

State Department of Financial Services, to Timothy Hayes, General Counsel, Ocwen
Financial Corporation (Feb. 26, 2014), available at
http://www.dfs.ny.gov/about/press2014/pr140226-letter.pdf (last visited, Nov. 5, 2014).
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41.
Lawskys letter noted that Ocwens management owns stock or stock
options in the affiliated companies, which raises the possibility that management has the
opportunity and incentive to make decisions concerning Ocwen that are intended to
benefit the share price of the affiliated companies, resulting in harm to borrowers,
mortgage investors, or Ocwen shareholders as a result.21
42.
Lawskys review of Ocwens operations revealed that the companys Chief
Risk Officer served in the same role for Altisource, and reported directly to Mr. Erbey in
both capacities.22 As Lawsky explained, Ocwen and Altisources joint Chief Risk
Officer seemed not to appreciate the potential conflicts of interest posed by this dual role,
10
which was particularly alarming given his role as Chief Risk Officer.23 Lawskys letter
11
further explains that the Chief Risk Officer told the on-site compliance monitor that
12
Ocwen paid his entire salary, but he did not know and apparently never asked which
13
company paid his risk management staff.24 Lawsky concluded that, while the Chief Risk
14
Officer has since been removed from his role at Altisource, his and Ocwens failure to
15
affirmatively recognize this conflict demonstrates that the relationship between Ocwen
16
and the affiliated companies warrants further examination.25
17
43.
According to Lawsky, the Departments review of Ocwens mortgage
18
servicing practices . . . also found that Ocwen relies extensively on affiliated companies
19
for its information management system (from the programming of comment codes to
20
functioning as Ocwens IT help desk), as well as procurement of third party services,
21
which further demonstrates the interconnected nature of Ocwens relationship with the
22
affiliated companies.26
23
21
24
Id.
22
25
Id.
23
Id.
26
24
Id.
27
25
Id.
28
26
Id.
27
28
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44.
Indeed, following the separation in 2009, Ocwen is contractually obligated to
purchase mortgage and technology services from Altisource under service agreements that
extend through 2020.27 Ocwen is now Altisources largest customer, accounting for 60%
of Altisources total revenue in 2012.28
45.
As part of the Departments ongoing examination of Ocwens mortgage
servicing practices, in April 2014 Lawsky sent Ocwen another letter addressing
conflicted business relationships and self-dealing between Ocwen and Altisource.29
More specifically, Lawsky stated that:
13
One particularly troubling issue is the relationship between

Ocwen and Altisource Portfolios subsidiary, Hubzu, which
Ocwen uses as its principal online auction site for the sale of its
borrowers homes facing foreclosure, as well as investor-owned
properties following foreclosure. Hubzu appears to be charging
auction fees on Ocwen-serviced properties that are up to three
time times the fees charged to non-Ocwen customers
14
...
15
The relationship between Ocwen, Altisource Portfolio, and

Hubzu raises signficiant concerns regarding self-dealing. In
particular, it creates questions about whether those companies
are charging inflated fees through conflicted business
relationships, and thereby negatively impacting homeowners
and mortgage investors. Alternatively, if the lower fees are
necessary to attract non-Ocwen business on the open market, it
raises concerns about whether Ocwen-serviced properties are
10
11
12
16
17
18
19
20
21
22
23
24
25
27
Altisource Portfolio Solutions S.A., SEC FORM 10-K (Period Ending Dec. 31, 2012),
available at http://www.sec.gov/Archives/edgar/data/1462418/
000110465913009969/a13-2839_110k.htm (last visited Sept. 9 2012).
28
Id.
29
28

Financial Corporation (April 21, 2014), available at
http://www.housingwire.com/ext/resources/files/Editorial/Lawsky-Letter-to-Ocwen-REAltisource-Hubzu.pdf (last visited, Nov. 5, 2014).
27
13
26
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being funneled into an uncompetitive platform at inflated

costs.30
1
2
46.
3
4
5
6
7
8
Ocwens use of related companies to provide fee based services.31 As Lawsky explained,
[b]ecause mortgage servicing presents the extraordinary circumstance where there is
effectively no customer to select a vendor for ancillary services, Ocwens use of related
companies to provide such services raises concerns about whether such transactions are
priced fairly and conducted at arms-length.32
47.
9
10
On August 4, 2014, Lawsky sent yet another letter raising concerns about
Once again, Lawskys August 2014 letter was particularly concerned with
transactions between Ocwen and related company Altisource:

[T]he Department has serious concerns about the apparently
conflicted role played by Ocwen Executive Chairman William
Erbey and potentially other Ocwen officers and directors in
directing profits to Altisource, which is related to Ocwen but
is formally a separate, publicly traded company. As you know,
Mr. Erbey is Ocwens largest shareholder and is also the
Chairman of and largest shareholder in Altisource. In fact, Mr.
Erbeys stake in Altisource is nearly double his stake in Ocwen:
29 percent versus 15 percent. Thus, for every dollar Ocwen
makes, Mr. Erbeys share is 15 cents, but for every dollar
Altisource makes, his share is 29 cents.
11
12
13
14
15
16
17
18
The Department and its Monitor have uncovered a growing

body of evidence that Mr. Erbey has approved a number of
transactions with related companies, despite Ocwens and
Altisources public claims -- including in SEC filings -- that he
recuses himself from decisions involving related companies.
19
20
21
22
23
24
25
26
27
28
27
28
30
Id.
31

Financial Corporation (Aug. 4, 2014), available at
http://www.dfs.ny.gov/about/press2014/pr140804-ocwen-letter.pdf (last visited, Nov. 5,
2014).
32
Id.
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Finally, Ocwen and Altisource state in their public filings that

rates charged under agreements with related companies are
market rate, but Ocwen has not been able to provide the Monitor
with any analysis to support this assertion.33
1
2
3
48.
4
5
6
7
8
9
dealings. According to OFCs most recent filing with the Securities and Exchange
Commission (SEC), on June 12, 2014 it received an SEC subpoena, in which the SEC
requested production of various documents relating to [OFCs] business dealings with
Altisource, HLSS, [Altisource Asset Management Corp], and Altisource Residential and
the interests of [OFCs] directors and executive officers in these companies.34
49.
10
11
12
13
16
Ocwen continuously, and systematically, engages in self-dealing transactions with

Altisource.
50.
continuing unit with a common purpose.

Ocwens Scheme to Mark Up Fees for Default-Related Services
51.
18
20
21
22
23
24
Accordingly, although Ocwen and Altisource technically are separate
entities, they are effectively joined together, as affiliated companies, operating as a
17
19
Despite the fact that Lawsky, the SEC, and other financial regulators have
raised significant concerns about the tangled web of conflicts between the entities,
14
15
Lawsky is not the only regulator raising questions about Ocwens business
In its loan servicing operations, Ocwen follows a strategy to generate
fraudulently concealed default-related fee income. Rather than simply obtain defaultrelated services directly from independent third-party vendors, and charge homeowners
for the actual cost of these services, Ocwen has a policy, practice, and procedure of
marking up fees for default-related services on homeowners loan accounts. As a result,
even though the mortgage market has collapsed, and more and more borrowers are falling
into delinquency, Ocwen continues to earn substantial profits.
25
26
27
28
27
28
33
Id. (internal citations omitted).
34
Ocwen Financial Corp., SEC Form 10-Q (Period Ending June 30, 2014), available at
http://www.housingwire.com/ext/resources/files/Editorial/Documents/SEC-ABEA6F4AAO-873860-14-16.pdf (last visited October 23, 2014).
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52.
Ocwens scheme works as follows: Ocwen directs Altisource to order and
coordinate default-related services, and, in turn, Altisource places orders for such services
with third-party vendors. The third-party vendors charge Altisource for the performance
of the default-related services, Altisource then marks up the price of the vendors services,
in numerous instances by 100% or more, before charging the services to Ocwen. In
turn, Ocwen bills the marked-up fees to homeowners.
53.
Through this complex arrangement with Altisource, which is intended to
disguise the marked-up fees for default-related services, Ocwen effectively side-steps the
borrower protections in the mortgage contract.
10
54.
The mortgage contract between a lender and a homeowner generally consists
11
of two documents: (i) the promissory note (the Note); and (ii) the mortgage/security
12
instrument/deed of trust (the Deed of Trust). The mortgage contacts serviced by Ocwen
13
are substantially similar because they conform to the standard Fannie Mae form contract.
14
The contract contains certain disclosures describing what is supposed to happen if
15
borrowers default on their loans.
16
17
55.
loan servicer will:

pay for whatever is reasonable or appropriate to protect the note
holders interest in the property and rights under the security
instrument, including protecting and/or assessing the value of
the property, and securing and/or repairing the property.
18
19
20
21
22
The Deed of Trust discloses to homeowners that, in the event of default, the
(emphasis added.)
56.
The Deed of Trust further discloses that any such amounts disbursed by the
23
servicer to a third party shall become additional debt of the homeowner secured by the
24
Deed of Trust and shall bear interest at the Note rate from the date of disbursement.
25
(emphasis added.)
26
57.
Additionally, the Note discloses to homeowners that with respect to
27
Payment of the Note Holders Costs and Expenses, if there is a default, the homeowner
28
will have to pay back costs and expenses incurred in enforcing the Note to the extent
27
28
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not prohibited by applicable law.
58.
Thus, the mortgage contract discloses to homeowners that the servicer will
pay for default-related services when reasonably necessary, and will be reimbursed or
paid back by the homeowner for amounts disbursed. Nowhere is it disclosed to
borrowers that the servicer may engage in self-dealing to mark up the actual cost of those
services to make a profit. Nevertheless, that is exactly what Ocwen does.
59.
BPOs are a significant category of third party default-related services for
which, in furtherance of Ocwens unlawful enterprise, fees are assessed on homeowners
loan accounts with substantial, undisclosed mark-ups, fraudulently generating revenue in
10
the loan servicing business.
11
60.
As discussed above, by charging marked-up fees for BPOs, Ocwen violates
12
the disclosures made to borrowers. Furthermore, the wrongful nature of the marked-up
13
fees is demonstrated by the fact that Ocwen conceals the marked-up profits assessed on
14
homeowners loan accounts.
15
61.
Although Ocwen assesses fees for BPOs on borrowers accounts in the range
16
of $100 to $109, as of December 2010, under Fannie Mae guidelines, the maximum
17
reimbursable rate for an exterior BPO was $80,35 and in practice, the actual cost was much
18
less. According to the National Association of BPO Professionals, the actual cost of a
19
BPO may be as little as $30.36
20
21
62.
less than the marked-up fee it assesses to borrowers.
22
23
24
25
26
27
28
27
28
Ocwen indisputably is aware that the actual cost of a BPO is significantly
63.
In fact, Ocwen has a significant amount of experience in the BPO
marketplace. Beginning in mid-2000, Ocwen Federal Bank FSB (Ocwen Bank), a

35
See Fannie Mae, Broker Price Opinion Providers and Pricing Structure, available at
https://efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/ntce121710a.pdf (last visited Feb.
1, 2012).
36
See National Association of BPO Professionals (NABPOP), Broker Price Opinion

BPO Brief, available at http://www.nabpop.org/Advocacy-BPOBrief-2.php (last visited
Feb. 2, 2012).
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former wholly-owned subsidiary of OFC, began selling marked-up BPOs to Wall Street
firms acquiring large pools of underperforming loans.
64.
Ocwen Banks in-house BPO shop was the subject of the litigation styled
Cartel Asset Management v. Ocwen Financial Corp., Case No. 1:01-cv-01644-REB-CBS
(D. Colo.) (Cartel). In Cartel, Cartel Asset Management, Inc. (CAM), a large
national BPO vendor, sued OFC, Ocwen Technology XChange, Inc., and Ocwen Bank for
theft of CAMs trade secret -- a confidential list of experienced, responsive and competent
realtors who produced high-quality BPOs.37 Ocwen Bank facilitated this theft by secretly
copying the names and contact information of realtors identified on BPOs that it
10
purchased from CAM, and then embedding the stolen information into its own incomplete
11
database of BPO providers.38
12
65.
In 2004, a jury awarded CAM compensatory and punitive damages.39 While
13
the judgment was on appeal, OFC dissolved Ocwen Bank and transferred the database
14
containing the stolen names and contact information to OLS, who continued to use and
15
profit from CAMs trade secret. OLS was added as a defendant in Cartel after the Tenth
16
Circuit remanded for a new trial on damages. In September 2010, a jury returned a
17
verdict in CAMs favor for more than $13.7 million in compensatory and punitive
18
damages based on the theft of the trade secret.40 This jury verdict covered the period up
19
through August 10, 2009, the date when OFC transferred the BPO product line and the
20
database to its affiliated company Altisource. As with OLS before it, Altisource has
21
continued to use and generate profits from CAMs trade secret.
22
23
66.
Notably, in Cartel, William C. Erbey, OFCs Executive Chairman, offered
the following testimony, under penalty of perjury, concerning Ocwen Banks BPO
24
37
25
See Cartel, Case No. 1:01-cv-01644-REB-CBS, Dkt. 438 at 1-4 (D. Colo. Sept. 18,
2007).
26
38
Id. at 13-17.
27
39
Id. at 17-18.
28
40
Id., Dkt. 825.
27
28
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business:
[A]s of 2004, [Ocwen] Bank would pay an agent or broker
approximately $45 to $50 to provide a BPO and then sell the
BPO for a profit. A reviewed BPO would be sold for
approximately $150 and an unreviewed BPO for approximately
$70.41
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27
28
67.
Despite knowing the actual cost of a BPO is approximately $50, Ocwen
routinely and repeatedly assesses borrowers BPO fees of $100 or more, representing a
100% mark-up, in clear violation of the mortgage contract.
68.
Ocwen also assesses fees for services related to the examination of the title to
the property securing the loan, all of which are ordered through Altisource. These fees
typically appear as a Title Search fee, a Title Report Fee, or fees for FC Thru Title
Searches on homeowners monthly statements.
69.
Upon information and belief, the title examination fees assessed by Ocwen
are significantly marked-up. For example, a title search fee typically ranges between
$150 and $450. Nevertheless, Ocwen routinely charges homeowners $829 for a Title
Search.
70.
Using its enterprise -- comprised of affiliated companies, like Altisource, and
third party property preservation vendors -- and its automated mortgage loan
management system, Ocwen engaged in a scheme to fraudulently conceal and assess
unlawfully marked-up fees for default-related services on homeowners loan accounts,
cheating hundreds of thousands of borrowers out of hundreds of millions dollars.
Furthermore, to conceal its activities and mislead homeowners about the true nature of its
actions, Ocwen employed a corporate practice that omits the true nature of the fees that
are being assessed on homeowners loan accounts. These practices are common to all of
Ocwens files.
71.
As a result of the practices of Ocwens unlawful enterprise, hundreds of
thousands of unsuspecting borrowers are cheated out of millions of dollars.

41
Id., Dkt. 438 at 25 (emphasis added).

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Ocwen Misapplies Borrowers Payments
1
2
72.
For subprime servicers such as Ocwen, late fees alone constitute a significant
fraction of its total income and profit. As a result, Ocwen has an incentive to push
homeowners into default and keep them there.
5
6
7
73.
Ocwen accomplishes this objective by, inter alia, misapplying homeowners
payments, and then cascading their loan accounts with illicit late fees.
74.
These unlawful late fees have forced many homeowners into default, opening
the flood gates for additional late fees and significant charges for defaulted-related
services. Over time, these egregious late fees and fees for default-related services can
10
total up to thousands of dollars, making it nearly impossible for homeowners to become
11
current on their loan.
12
13
14
75.
Ocwens method of misapplying payments in order to charge innocent
borrowers thousands of dollars in fees and charges is a widespread practice.

76.
Under the terms of Paragraph 2, Application of Payments or Proceeds, of
15
the Deed of Trust in the Fannie Mae a standard form mortgage contract, there is a
16
hierarchy in which funds from customer payments are to be applied. Specifically, funds
17
are to be applied in the following order: (1) interest due under the promissory note; (2)
18
principal due under the promissory note; (3) amounts due for any escrow items; (4) late
19
charges; and (5) fees for default-related services and other amounts. Escrow items are
20
generally defined as taxes or assessments which may take priority over the lenders
21
interest in the property and premiums for insurance a homeowner is required to have
22
under the terms of the mortgage contract.
23
77.
One way Ocwen misapplies payments is to divert a portion of the interest and
24
principal payments made by homeowners who pay their own property taxes and maintain
25
proper insurance to escrow accounts.
26
78.
An escrow account is an account set up and controlled by a lender on behalf
27
of a homeowner to pay these escrow items. As mentioned above, a homeowners
28
monthly payment cannot be diverted to an escrow account until that payment covers, in
27
28
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1
2
full, the borrowers interest and principal payment due in that given month.
79.
Ocwen routinely violates the payment hierarchy contained in homeowners
mortgage contracts and diverts customer payments away from principal and interest on
the loan.
80.
As a result of this violation, homeowners who timely pay their own real
estate taxes and insurance premiums are denied the proper interest and principal credits
under the loan agreement. Ocwen instead diverts a portion of the funds (which end up not
being needed to pay escrow items) to an escrow account or flat out rejects the payment.
81.
Ocwens failure to accept or properly credit homeowners payments to cover,
10
in full, their monthly interest and principal obligations forces homeowners into default.
11
Once in default, Ocwen then makes demands that these homeowners make significant
12
payments, which are riddled with unjust late and default-related service fees.
13
82.
Additionally, when Ocwen forces homeowners who pay their own property
14
taxes and maintain their own insurance into default by misapplying their payments to an
15
escrow account, these homeowners are denied the ability to access the surplus in their
16
escrow account.
17
83.
18
19
20
surplus escrow funds only when their loan is paid in full.

84.
Ocwen, in essence, is using the escrow account as one way to justify the late
and default-related fees it charges homeowners.

Homeowners Suffer Harm as a Result of Ocwens Practices
21
22
Under the terms of the loan agreement, Ocwen will refund homeowners their
85.
In addition to the direct monetary damages caused to homeowners, in the
23
form of the difference between the actual cost of the services provided and the marked-up
24
fees assessed on homeowners loan accounts, homeowners suffer other, less obvious
25
injuries as a result of the practices described herein.
26
86.
The assessment of these marked-up fees can make it impossible for
27
homeowners to become current on their loan. Charges for such default-related services
28
can add hundreds or thousands of dollars to homeowners loans over time, driving them
27
28
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further into default.

87.
When homeowners get behind on their mortgage, and fees for these default-
related services are stacked on to the past-due principal and interest payments, Ocwens
practices make it increasingly difficult for homeowners to ever bring their loan current.
Even if homeowners pay the delinquent principal and interest payments, the late and
default-related service fees ensure that homeowners stay in default. Although the next
payment comes in on time, often through automatic payment deductions from
homeowners bank accounts, part of the payment is applied to the fees first, so there is not
enough to cover the entire monthly payment. This makes that payment late, creating a
10
cascade of more fees, and more arrears, that keeps homeowners in delinquency. By the
11
time homeowners are aware, Ocwen is threatening to foreclose unless a huge payment is
12
made, and the weight of these marked-up fees drops homeowners into a financial abyss.
13
14
88.
move deeper into default, homeowners are driven into foreclosure.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27
28
Additionally, as a result of Ocwens practices, which force homeowners to
Plaintiffs Claims Against Ocwen

89.
Plaintiff Weiner is a resident of Amador County, California.
90.
Plaintiff Weiner originated his loan with Mylor Financial on December 10,
2003, for $322,700 at 6.5000%. His monthly interest and principal payment was
$2,039.68.
91.
Prior to late 2012 or early 2013, GMAC serviced Plaintiff Weiners
mortgage. However, on or around late 2012 or early 2013, Ocwen took over the servicing
of Plaintiff Weiners mortgage.
92.
Ocwen misapplied Plaintiff Weiners principal and interest payment to an
escrow account established after GMAC paid Plaintiff Weiners property taxes in 2010.
93.
Plaintiff Weiner fully reimbursed GMAC in early 2011 for the property taxes
it paid. He also paid a $400 escrow fee. Following this incident, Plaintiff Weiner had
telephone conversations with GMAC staff where he arranged that he would pay his own
property taxes going forward. Plaintiff Weiner promised to provide timely proof of said
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payments.
94.
Since making this arrangement, Plaintiff Weiner has paid in full all property
taxes associated with his property and has maintained the proper insurance required by his
mortgage contract. Plaintiff Weiner also has always provided Ocwen with timely notice
of his property tax payments.
95.
Notwithstanding Plaintiff Weiners timely property tax and insurance
premium payments, Ocwen charges Plaintiff Weiner a fee of $600 per year for
maintaining an escrow account, and it has failed to properly apply his interest and
principal payments to his loan. Instead, Ocwen has diverted funds to his escrow account.
10
Although Ocwen has never once used it to pay property taxes or insurance, and Plaintiff
11
Weiners escrow account has a positive balance of more than $10,000. More recently,
12
Ocwen has flat out rejected Plaintiff Weiners interest and principal payments on the basis
13
that they are not sufficient to satisfy the defaulted amount on the loan, i.e., interest and
14
principal plus escrow fees.
15
16
17
96.
By diverting a portion of Plaintiff Weiners interest and principal payments
to an escrow account, Ocwen has failed to properly credit Plaintiff Weiners account.
97.
Ocwens failure to properly credit Plaintiff Weiners interest and principal
18
payments has burdened his account with unscrupulous fees and has forced his loan into
19
default.
20
98.
Plaintiff Weiner not only has been denied the right to have his payments
21
applied correctly to his loan account, but he has also been unable to claim interest
22
deductions on his federal and state tax returns, refinance his loan, has been subjected to
23
harassing telephone calls, and has been under the constant fear of imminent foreclosure.
24
25
26
27
28
27
28
99.
Because Ocwen has forced his loan into default, Plaintiff Weiner has been
denied access to the surplus in his escrow account.

100. Ocwen also continually assessed marked-up fees for default-related services
on the mortgage account of Plaintiff Weiner, thereby subjecting him to an invalid debt.
101. Ocwen assessed BPO fees of $109 and $100 on the mortgage account of
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Plaintiff Weiner on September 4, 2013 and February 27, 2014, respectively.

102. Ocwen also charged Plaintiff Weiner a series of title report, title search, and
other default-related service fees that are either not legally due under the mortgage
contract and applicable law, or that are in excess of amounts legally due.
5
6
7
103. Ocwen assessed a Title Search fee in the amount of $829 on the mortgage
account of Plaintiff Weiner on June 9, 2014.
104. Ocwen alone maintains a complete accounting of all fees assessed and paid,
and the details of each and every fee assessed and paid cannot be alleged with complete
precision without access to Ocwens records. Nevertheless, Plaintiff Weiner is informed
10
and believes, and on that basis alleges, that he paid some or all of the unlawful fees
11
assessed on his account.
12
13
STATUTE OF LIMITATIONS
105. Any applicable statutes of limitations have been tolled by Ocwens knowing
14
and active concealment, denial, and misleading actions, as alleged herein. Plaintiff and
15
members of the Class, as defined below, were kept ignorant of critical information
16
required for the prosecution of their claims, without any fault or lack of diligence on their
17
part. Plaintiff and members of the Class could not reasonably have discovered the true
18
nature of the Ocwens scheme.
19
106. Ocwen is under a continuous duty to disclose to Plaintiff and members of the
20
classes the true character, quality, and nature of the default-related service fees they assess
21
on borrowers accounts. Ocwen knowingly, affirmatively, and actively concealed, and
22
continues to conceal, the true character, quality, and nature of its assessment of marked-up
23
fees on homeowners loan accounts. Plaintiff and members of the Class reasonably relied
24
upon Ocwens knowing, affirmative, and active concealment. Based on the foregoing,
25
Ocwen is estopped from relying on any statutes of limitation as a defense in this action.
26
107. The causes of action alleged herein did or will only accrue upon discovery of
27
the true nature of the charges assessed against borrowers accounts, as a result of Ocwens
28
continuing fraudulent concealment of material facts. Plaintiff and members of the Class
27
28
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did not discover, and could not have discovered, through the exercise of reasonable
diligence, the true nature of the unlawful fees assessed against their accounts.
108. Legal scholars have explained that, as a result of these deceptive practices, it
is impossible for borrowers to determine that they are victims of these violations, because
without a true itemization that identifies the nature of each fee, parties cannot verify that
a mortgage claim is correctly calculated . . . the servicer could be overreaching and
charging fees that are not permitted by law or by the terms of the contract. . . . By
obscuring the information needed to determine the alleged basis for the charges, servicers
thwart effective review of mortgage claims. The system can only function as intended if
10
complete and appropriate disclosures are made.42

109. Additionally, judges examining similar conduct have found that, [a]t the
11
12
heart of the problem is [the loan servicers] failure to disclose to its borrowers/debtors, the
13
trustee, or the Court, the nature or amount of fees and charges assessed . . . [l]ack of
14
disclosure facilitates the injury. Naive borrowers/debtors, trustees and creditors rightly
15
assume that [the loan servicer] is complying with the plain meaning of its notes,
16
mortgages, court orders and confirmed plans. Why would anyone assume otherwise? . . .
17
How are they to challenge a practice or demand correction of an error they do not know
18
exists.43
19
CLASS ACTION ALLEGATIONS
20
110. Plaintiff brings this action, on behalf of himself and all others similarly
21
situated, as a class action under Rule 23 of the Federal Rules of Civil Procedure.
111. The classes Plaintiff seeks to represent (collectively, the Class) are defined
22
23
as follows:
24
25
26
42
27
See Katherine Porter, Misbehavior and Mistake in Bankruptcy Mortgage Claims, 87

Tex. L. Rev. 121, 155 (2008).
28
43
27
28
See In re: Jones, 418 B.R. 687, 699 (E.D. La. 2009).
25
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All residents of the United States of America who had a loan

serviced by Ocwen, continuing through the date of final
disposition of this action (the Class).
1
2
3
All residents of the State of California who had a loan serviced

by Ocwen, continuing through the date of final disposition of
this action (the California Subclass).
4
5
112. Plaintiff reserves the right to amend the Class definitions if discovery and
6
7
further investigation reveals that the Class should be expanded or otherwise modified.
113. Plaintiff reserves the right to establish sub-classes as appropriate.
114. This action is brought and properly may be maintained as a class action
9
10
11
12
under the provisions of Federal Rules of Civil Procedure 23(a)(1)-(4) and 23(b)(1), (b)(2)
or (b)(3), and satisfies the requirements thereof. As used herein, the term Class
Members shall mean and refer to the members of the Class.
115. Numerosity: While the exact number of members of the Class is unknown to
13
14
15
16
17
18
19
20
Plaintiff at this time and can only be determined by appropriate discovery, membership in
the Class is ascertainable based upon the records maintained by Ocwen. At this time,
Plaintiff is informed and believe that the Class includes hundreds of thousands of
members. Therefore, the Class is sufficiently numerous that joinder of all members of the
Class in a single action is impracticable under Federal Rule of Civil Procedure Rule
23(a)(1), and the resolution of their claims through the procedure of a class action will be
of benefit to the parties and the Court.
116. Ascertainablity: Names and addresses of members of the Class are available
21
22
23
24
25
26
27
28
27
28
from Ocwen. Notice can be provided to the members of the Class through direct mailing,
publication, or otherwise using techniques and a form of notice similar to those
customarily used in consumer class actions arising under California state law and federal
law.
117. Typicality: Plaintiffs claims are typical of the claims of the other members
of the Class which they seek to represent under Federal Rule of Civil Procedure 23(a)(3)
because each Plaintiff and each member of the Class has been subjected to the same
26
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deceptive and improper practices and has been damaged in the same manner thereby.
118. Adequacy: Plaintiff will fairly and adequately represent and protect the
interests of the Class as required by Federal Rule of Civil Procedure Rule 23(a)(4).
Plaintiff is an adequate representative of the Class, because he has no interests which are
adverse to the interests of the members of the Class. Plaintiff is committed to the
vigorous prosecution of this action and, to that end, Plaintiff has retained counsel who are
competent and experienced in handling class action litigation on behalf of consumers.
119. Superiority: A class action is superior to all other available methods of the
fair and efficient adjudication of the claims asserted in this action under Federal Rule of
10
11
Civil Procedure 23(b)(3) because:

(a)
the expense and burden of individual litigation make it economically
12
unfeasible for members of the Class to seek to redress their claims
13
other than through the procedure of a class action;
14
(b)
if separate actions were brought by individual members of the Class,
15
the resulting duplicity of lawsuits would cause members to seek to
16
redress their claims other than through the procedure of a class action;
17
and
18
(c)
19
20
absent a class action, Ocwen likely would retain the benefits of their
wrongdoing, and there would be a failure of justice.
120. Common questions of law and fact exist as to the members of the Class, as
21
required by Federal Rule of Civil Procedure 23(a)(2), and predominate over any questions
22
which affect individual members of the Class within the meaning of Federal Rule of Civil
23
Procedure 23(b)(3).
24
25
121. The common questions of fact include, but are not limited to, the following:
(a)
Whether Ocwen engaged in unlawful, unfair, misleading, or deceptive
26
business acts or practices in violation of California Business &
27
Professions Code sections 17200 et seq.;
28
27
28
27
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(b)
2
3
as alleged herein, is illegal;

(c)
4
5
(d)
(e)
(f)
(g)
16
17
Whether Plaintiff and members of the class sustained damages, and if

so, the appropriate measure of damages; and
(h)
Whether Plaintiff and members of the Class are entitled to an award of

reasonable attorneys fees, pre-judgment interest, and costs of this suit.
14
15
Whether documents and statements provided to Plaintiff and members

of the Class concealed material facts;
12
13
Whether Ocwen engaged in a pattern or practice of racketeering, as

alleged herein;
10
11
Whether Ocwen was a member of, or participant in, the conspiracy

alleged herein;
8
9
Whether Ocwens practice of misapplying borrowers payments, as

alleged herein, is illegal;
6
7
Whether Ocwens practice of charging marked-up fees to borrowers,
122. In the alternative, this action is certifiable under the provisions of Federal
Rule of Civil Procedure 23(b)(1) and/or 23(b)(2) because:
(a)
The prosecution of separate actions by individual members of the
18
Class would create a risk of inconsistent or varying adjudications with
19
respect to individual members of the Class which would establish
20
incompatible standards of conduct for Ocwen;
21
(b)
The prosecution of separate actions by individual members of the
22
Class would create a risk of adjudications as to them which would, as a
23
practical matter, be dispositive of the interests of the other members of
24
the Class not parties to the adjudications, or substantially impair or
25
impede their ability to protect their interests; and
26
(c)
Ocwen has acted or refused to act on grounds generally applicable to
27
the Class, thereby making appropriate final injunctive relief or
28
corresponding declaratory relief with respect to the Class as a whole
27
28
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and necessitating that any such relief be extended to members of the
Class on a mandatory, class-wide basis.
3
4
123. Plaintiff is not aware of any difficulty which will be encountered in the
management of this litigation which should preclude its maintenance as a class action
FIRST CAUSE OF ACTION
BROUGHT ON BEHALF OF THE CALIFORNIA SUBCLASS

Violation of Californias Unfair Competition Law
(California Business & Professions Code 17200 et seq.)
7
8
9
10
11
12
124. Plaintiff incorporates by reference in this cause of action each and every
allegation of the preceding paragraphs, with the same force and effect as though fully set
forth herein.
125. Plaintiff Weiner brings this cause of action on behalf of himself and the
members of the California Subclass.
13
126. California Business and Professions Code section 17200 prohibits any
14
unlawful, unfair or fraudulent business act or practice. For the reasons described above,
15
Ocwen has engaged in unfair, or fraudulent business acts or practices in violation of
16
California Business and Professions Code sections 17200 et seq.
17
127. In the course and conduct of their loan servicing and collection, Ocwen
18
knowingly, affirmatively, and actively concealed the true character, quality, and nature of
19
their assessment of marked-up default-related service fees against borrowers accounts.
20
Relying on Ocwen, Plaintiff Weiner, and members of the California Subclass believe they
21
are obligated to pay the amounts specified in Ocwens communications.
22
128. In truth and in fact, borrowers are not obligated to pay the amounts that have
23
been specified in Ocwens communications concerning default-related services, including
24
BPOs and title searches. Ocwen disguises the fact that the amounts they represent as
25
being owed have been marked-up beyond the actual cost of the services, violating the
26
disclosures in the mortgage contract. Contrary to Ocwens communications, they are not
27
legally authorized to assess and collect these marked-up fees.
28
27
28
129. Ocwens knowing, affirmative, and active concealment, as set forth herein,
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constitutes an unlawful practice because it violates Title 18 United States Code sections
1341, 1343, and 1962, as well as California Civil Code sections 1572, 1573, 1709, 1710,
and 1711, Californias Rosenthal Fair Debt Collection Practices Act, and the common
law.
130. Ocwens practice of misapplying borrowers payment, thereby breaching
borrowers mortgage contracts, also constitutes an unlawful practice in violation of
California Business and Professions Code sections 17200 et seq.
131. Ocwens knowing, affirmative, and active concealment, as set forth herein,
also constitute unfair business acts and practices within the meaning of California
10
Business and Professions Code sections 17200 et seq., in that Ocwens conduct was
11
injurious to consumers, offended public policy, and was unethical and unscrupulous.
12
Plaintiff Weiner also asserts a violation of public policy by concealing material facts from
13
consumers. Ocwens violation of Californias consumer protection and unfair
14
competition laws in California resulted in harm to consumers.
15
16
17
132. There were reasonable alternatives available to Ocwen to further their

legitimate business interests, other than the conduct described herein.
133. California Business and Professions Code section 17200 also prohibits any
18
fraudulent business act or practice. Ocwens concealment of material facts, as set forth
19
above, was false, misleading, or likely to deceive the public within the meaning of
20
California Business and Professions Code section 17200. Ocwens concealment was
21
made with knowledge of its effect, and was done to induce Plaintiff Weiner and members
22
of the California Subclass to pay the marked-up default related service fees.
23
134. Plaintiff Weiner and members of the California Subclass relied on their
24
reasonable expectation that Ocwen would comply with the disclosures set forth in the
25
mortgage agreement, Notes, and Deeds of Trust, and as a result, Plaintiff Weiner and
26
members of the California Subclass relied on Ocwens disclosures about the fees on their
27
statements, reasonably believing the default-related service fees to be valid charges that
28
were not marked-up. Indeed, to lull borrowers into a sense of trust and dissuade them
27
28
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from challenging Ocwens unlawful fee assessment, Ocwen concealed their scheme from
borrowers by telling them, in statements and other documents, that such fees are in
accordance with the terms of their mortgage. Had the true nature of the fees been
disclosed to Plaintiff Weiner and the members of the California Subclass, they would
have been aware of the mark-ups and Plaintiff Weiner and the members of the California
Subclass would have disputed the charges and not paid them.
135. Plaintiff Weiner and the members of the California Subclass have been
injured in fact and suffered a loss of money or property as a result of Ocwens fraudulent,
unlawful, and unfair business practices. Plaintiff Weiner and the members of the
10
California Subclass would not have paid Ocwens unlawful fees or they would have
11
challenged the assessment of such fees on their accounts had it not been for Ocwens
12
concealment of material facts.
13
136. Ocwen has thus engaged in unlawful, unfair, and fraudulent business acts
14
entitling Plaintiff Weiner and the members of the California Subclass to judgment and
15
equitable relief against Ocwen, as set forth in the Prayer for Relief.
16
137. Additionally, under Business and Professions Code section 17203, Plaintiff
17
Weiner and members of the California Subclass seek an order requiring Ocwen to
18
immediately cease such acts of unlawful, unfair, and fraudulent business practices, and
19
requiring Ocwen to correct its actions.
20
SECOND CAUSE OF ACTION
21
Violations of the Racketeer Influenced and Corrupt Organizations Act

(18 U.S.C. 1962(c))
22
23
24
25
26
27
138.
Plaintiff incorporates by reference in this cause of action each and every
forth herein.
139. Plaintiff brings this cause of action on behalf of himself and the members of
the Class.
28
27
28
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THE ENTERPRISE
140. Defendants OFC and OLS are persons within the meaning of Title 18
3
4
United States Code section 1961(3).

141. At all relevant times, in violation of Title 18 United States Code section
1962(c), Ocwen, including their directors, employees, and agents, along with Altisource
and Ocwens property preservation vendors conducted the affairs of an associated-in-fact
enterprise, as that term is defined in Title 18 United States Code section 1961(4) (the
Ocwen Enterprise). The affairs of the Ocwen Enterprise affected interstate commerce
through a pattern of racketeering activity.
10
142. The Ocwen Enterprise is an ongoing, continuing group or unit of persons and
11
entities associated together for the common purpose of limiting costs and maximizing
12
profits by fraudulently concealing assessments for unlawfully marked-up fees for default-
13
related services on homeowners loan accounts.
14
143. While the members of the Ocwen Enterprise participate in and are part of the
15
enterprise, they also have an existence separate and distinct from the enterprise. The
16
Ocwen Enterprise has a systematic linkage because there are contractual relationships,
17
agreements, financial ties, and coordination of activities between Ocwen, Altisource, and
18
the vendors that perform the default-related services.
19
144. Operating the Ocwen Enterprise according to policies and procedures
20
developed and established by its executives, Ocwen controls and directs the affairs of the
21
Ocwen Enterprise and uses the other members of the Ocwen Enterprise as
22
instrumentalities to carry out Ocwens fraudulent scheme.
23
145. These policies and procedures established by Ocwens executives include:
24
funneling default-related services through its affiliated company, Altisource, to disguise
25
unlawful mark-ups of services provided by third parties; providing statements that conceal
26
the true nature of the marked-up default related service fees; using mortgage loan
27
management software designed to assess undisclosed marked-up fees on borrowers
28
accounts; and failing to provide borrowers with accurate documentation to support
27
28
32
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assessments of fees for BPOs.
146. By developing and implementing policies and procedures leading to the
repeated, and unlawful, assessment of marked-up fees for default-related services, Ocwen
engaged in the conduct of the Ocwen Enterprise distinct from Ocwens own affairs as a
loan servicer.
THE PREDICATE ACTS
6
7
147. The Ocwen Enterprises systematic scheme to fraudulently conceal
unlawfully marked-up third party fees on the mortgage accounts of homeowners who
have mortgage loans administered by Ocwen, as described above, was facilitated by the
10
use of the United States Mail and wire. The Ocwen Enterprises scheme constitutes
11
racketeering activity within the meaning of Title 18 United States Code section 1961(1),
12
as acts of mail and wire fraud, under Title 18 United States Code sections 1341 and 1343.
13
148. In violation of Title 18 United States Code sections 1341 and 1343, the
14
Ocwen Enterprise utilized the mail and wire in furtherance of their scheme to defraud
15
borrowers whose loans are serviced by Ocwen by obtaining money from borrowers using
16
false or fraudulent pretenses.
17
149. Through the mail and wire, the Ocwen Enterprise provided mortgage
18
invoices, loan statements, payoff demands, or proofs of claims to homeowners,
19
affirmatively demanding that homeowners pay marked-up fees for default-related
20
services. Defendants also accepted payments and engaged in other correspondence in
21
furtherance of their scheme through the mail and wire.
22
150. The Ocwen Enterprise fraudulently and unlawfully assessed marked-up
23
default-related service fees in violation of the disclosures made in homeowners mortgage
24
agreements.
25
151. Furthermore, to lull homeowners into a sense of trust and dissuade them from
26
challenging Ocwens unlawful fee assessment, Ocwen concealed their scheme from
27
28
accordance with the terms of their mortgage.
27
28
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152. The mortgage invoices, loan statements, or proofs of claims provided to
borrowers disguised the fact that the default-related service fees assessed on homeowners
accounts were marked-up. By disguising the true nature of amounts purportedly owed in
communications to borrowers, the Ocwen Enterprise made false statements using the
Internet, telephone, facsimile, United States mail, and other interstate commercial carriers.
153. This fraudulent concealment was material to Plaintiff and the members of the
Class. Had the Ocwen Enterprise disclosed the true nature of the fees for default-related
services, Plaintiff would have been aware of the mark-up, and would have challenged
Ocwens unlawful fee assessments or would not have paid them.
10
11
12
154. Each of these acts constituted an act of mail fraud for purposes of Title 18
United States Code section 1341.
155. Additionally, using the Internet, telephone, and facsimile transmissions to
13
fraudulently communicate false information about these fees to borrowers, to pursue and
14
achieve their fraudulent scheme, the Ocwen Enterprise engaged in repeated acts of wire
15
fraud in violation of Title 18 United States Code section 1343.
16
156. The Ocwen Enterprises knowledge that its activities were fraudulent and
17
unlawful is evidenced by, among other things, the fact that they concealed the marked-up
18
nature of the default-related service fees in their communications to borrowers.
19
157. The predicate acts specified above constitute a pattern of racketeering
20
activity within the meaning of Title 18 United States Code section 1961(5) in which the
21
Ocwen Enterprise have engaged under Title 18 United States Code section 1962(c).
22
158. All of the predicate acts of racketeering activity described herein are part of
23
the nexus of the affairs and functions of the Ocwen Enterprise racketeering enterprise.
24
The racketeering acts committed by the Ocwen Enterprise employed a similar method,
25
were related, with a similar purpose, and they involved similar participants, with a similar
26
impact on the members of the Class. Because this case is brought on behalf of a class of
27
similarly situated borrowers and there are numerous acts of mail and wire fraud that were
28
used to carry out the scheme, it would be impracticable for Plaintiff to plead all of the
27
28
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details of the scheme with particularity. Plaintiff cannot plead the precise dates of all of
the Ocwen Enterprises uses of the mail and wire because this information cannot be
alleged without access to the Ocwen Enterprises records.
159. The pattern of racketeering activity is currently ongoing and open-ended, and
threatens to continue indefinitely unless this Court enjoins the racketeering activity.
160. Numerous schemes have been completed involving repeated unlawful
7
8
9
conduct that by its nature, projects into the future with a threat of repetition.
161. As a direct and proximate result of these violations of Title 18 United States
Code sections 1962(c) and (d), Plaintiff and members of the class have suffered
10
substantial damages. Members of the Ocwen Enterprise are liable to Plaintiff and
11
members of the Class for treble damages, together with all costs of this action, plus
12
reasonable attorneys fees, as provided under Title 18 United States Code section 1964(c).
13
THIRD CAUSE OF ACTION
14
15
Violation of the Racketeer Influenced and Corrupt Organizations Act,

Conspiracy to Violate Title 18 United States Code section 1962(c)
(18 U.S.C. 1962(d))
16
17
18
forth herein.
19
20
21
the Nationwide Class.
164. As set forth above, in violation of Title 18 United States Code section
22
1962(d), Defendants conspired to violate the provisions of Title 18 United States Code
23
section 1962(c).
24
165. As set forth above, Ocwen, having directed and controlled the affairs of the
25
the Ocwen Enterprise, was aware of the nature and scope of the enterprises unlawful
26
scheme, and they agreed to participate in it.
27
166. As a direct and proximate result, Plaintiff and the members of the Class have
28
been injured in their business or property by the predicate acts which make up the Ocwen
27
35
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Enterprises patterns of racketeering activity in that marked-up fees for default-related
services were assessed on their mortgage accounts.
FOURTH CAUSE OF ACTION
BROUGHT ON BEHALF OF THE CALIFORNIA SUBCLASS

Violations of the Rosenthal Fair Debt Collection Practices Act
(California Civil Code 1788, et seq.)
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
forth herein.
168. Defendants are debt collectors within the meaning of California Civil Code
section 1788.2(c), because Defendants sent mortgage bills to Plaintiff and members of the
California Subclass, Plaintiff and members of the California Subclass made their
mortgage payments to Defendants, Defendants accepted those payments, and Defendants
made demands for payment, including the payment of marked-up fees for default-related
services, by sending letters, making telephone calls, and other attempts to collect
mortgage payments and fees.
169. The marked-up fees for default-related services purportedly owed by Plaintiff
and members of the California Subclass are a debt within the meaning of California
Civil Code section 1788.2(d), because they are money, property or their equivalent
which [are] due or owing or alleged to be due or owing from a natural person to another
person.
170. As alleged herein, and as set forth in detail above, Defendants have
committed violations of the Rosenthal Fair Debt Collection Practices Act, California Civil
Code section 1788, et seq. (RFDCPA), which incorporates by reference, and requires
compliance with, the provisions of the federal Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. 1692
171. The FDCPA and, therefore, the RFDCPA, prohibits a debt collector from
using any false, deceptive, or misleading representation or means in connection with the
28
27
28
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collection of any debt. 15 U.S.C. 1692e
172. Defendants knowingly, affirmatively, and actively concealed and suppressed
material facts, namely the fact that Defendants assessed borrowers accounts for marked-
up default-related services. Contrary to Ocwens communications, they are not legally
authorized to assess and collect these marked-up fees.
173. Pursuant to California Civil Code sections 1788.17 and 1788.30, Plaintiff and
members of the California Subclass are entitled to recover actual damages sustained as a
result of Defendants violations of the RFDCPA. Such damages include, without
limitation, monetary losses and damages. Additionally, because Defendants violations of
10
the RFDCPA were committed willingly and knowingly, Plaintiff and members of the
11
California Subclass are entitled to recover penalties of up to $1,000 per violation as
12
provided for in the RFDCPA.
13
174. Pursuant to California Civil Code sections 1788.17 and 1788.30, Plaintiff and
14
the California Subclass are entitled to recover all attorneys fees, costs, and expenses
15
incurred in the bringing of this action.
16
FIFTH CAUSE OF ACTION
17
Unjust Enrichment
18
19
20
forth herein.
21
22
23
24
25
the Class.
177. By their wrongful acts and omissions of material facts, Ocwen was unjustly
enriched at the expense of Plaintiff and members of the Class.
178.
The mortgage contract with borrowers like Plaintiff and the members of the
26
Class discloses that Ocwen will pay for default-related services when necessary, and they
27
will be reimbursed by the homeowner. Nowhere in the mortgage contract is it disclosed
28
that Ocwen may mark-up the actual cost of those services to make a profit.
27
28
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179. Nevertheless, Ocwen marks-up the prices charged by vendors, often by 100%
or more, and then, assesses borrowers accounts for the higher, marked-up fee so that
Ocwen can earn a profit.
180. Furthermore, to lull homeowners into a sense of trust and dissuade them from
challenging Ocwens unlawful fee assessment, Ocwen further conceals their scheme from
accordance with the terms of their mortgage.
181. Thus, Plaintiff and members of the Class were unjustly deprived.
182. It would be inequitable and unconscionable for Ocwen to retain the profit,
10
benefit and other compensation they obtained from their fraudulent, deceptive, and
11
misleading conduct alleged herein.
12
183. Plaintiff and members of the Class seek restitution from Ocwen, and seek an
13
order of this Court disgorging all profits, benefits, and other compensation obtained by
14
Ocwen from their wrongful conduct.
15
SIXTH CAUSE OF ACTION
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Fraud
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forth herein.
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186. Plaintiff reasonably expected that Ocwen would comply with the disclosures
23
set forth in the mortgage agreement, Notes, Deeds of Trust, and as a result, Plaintiff relied
24
on Ocwens disclosures about the fees on their statements, reasonably believing the
25
default-related service fees to be valid charges that were not marked-up.
26
187. To lull homeowners into a sense of trust and dissuade them from challenging
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Ocwens unlawful fee assessment, Ocwen concealed their scheme from borrowers by
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telling them, in statements and other documents, that such fees are in accordance with the
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terms of their mortgage.

188. Had the true nature of the fees been disclosed to Plaintiff and members of the
Class, they would have been aware of the mark-up, and Plaintiff would have disputed the
charges and not paid them.
189. As a result of Ocwens fraudulent concealment, Plaintiff and members of the
Class have been injured in fact and suffered a loss of money or property. Plaintiff and
members of the Nationwide Class would have challenged the assessment of such fees on
their accounts had it not been for Ocwens concealment of material facts.
190. Ocwen concealed material facts, as discussed above, with knowledge of the
10
effect of concealing of these material facts. Ocwen knew that by misleading consumers,
11
they would generate higher profits.
12
191. Plaintiff and members of the Nationwide Class justifiably relied upon
13
Ocwens knowing, affirmative, and active concealment. By concealing material
14
information about their scheme to assess marked-up default-related service fees on
15
borrowers accounts, Ocwen intended to induce Plaintiff and members of the Nationwide
16
Class into believing that they owed Ocwen money that it was not actually entitled to.
17
192. Ocwen acted with malice, oppression, or fraud.
18
193. As a direct and proximate result of Ocwens omissions and active
19
concealment of material facts, Plaintiff and each member of the Nationwide Class has
20
been damaged in an amount according to proof at trial.
21
SIXTH CAUSE OF ACTION
22
Breach of Contract
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forth herein.
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196. Ocwen assumed the obligations of Plaintiffs mortgage agreement, and the
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mortgage agreement of all Class members, when it took over the servicing of their loans.
197. Plaintiff satisfied his obligations under the mortgage agreement by making
timely payments of principal and interest.
198. Ocwen is in breach of contract by misapplying payments submitted by
Plaintiff and members of the Class, placing such payments in suspense accounts without
authorization by the mortgage agreements, and assessing late fees not authorized under
the mortgage agreement.
8
9
10
199. Ocwen knew or should have known that misapplying timely payments was
and continues to be a material breach of homeowners mortgage agreements.
200. Ocwen is in further breach of contract by treating Plaintiff and members of
11
the Class as if they were in default due to the misapplied payments, when, in fact, Plaintiff
12
and members of the Class are not delinquent under the mortgage agreement.
13
14
201. As a proximate result of Ocwens breaches, Plaintiff and members of the

Class have suffered compensatory damages in an amount to be proven at trial.
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PRAYER FOR RELIEF

Plaintiff, and on behalf of himself and the Class of all others similarly situated,
requests that the Court to enter judgment against Ocwen, as follows:
1.
Certifying the Class, as requested herein, certifying Plaintiff as the
representative of the Class, and appointing Plaintiffs counsel as counsel for the Class;
2.
Ordering that Ocwen is financially responsible for notifying all members of
the Class of the alleged fraudulent concealment discussed herein;

3.
Awarding Plaintiff and the members of the Class compensatory damages in
an amount according to proof at trial;

4.
Awarding restitution and disgorgement of Ocwens revenues or profits to
Plaintiff and members of the Class;

5.
Awarding Plaintiff and the members of the Class treble damages in an
amount according to proof at trial;

6.
Awarding declaratory and injunctive relief as permitted by law or equity,

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including: enjoining Ocwen from continuing the unlawful practices as set forth herein,
and directing Ocwen to identify, with Court supervision, victims of its conduct and pay
them restitution and disgorgement of all monies acquired by Ocwen by means of any act
or practice declared by this Court to be wrongful;
7.
Ordering Ocwen to engage in corrective advertising;
8.
Awarding interest on the monies wrongfully obtained from the date of
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collection through the date of entry of judgment in this action;

9.
Awarding attorneys fees, expenses, and recoverable costs reasonably
incurred in connection with the commencement and prosecution of this action; and
10.
For such other and further relief as the Court deems just and proper.
Dated: November 5, 2014
BARON & BUDD, P.C.

By: /s/ Mark Pifko
Mark Pifko
Daniel Alberstone (SBN 105275)
Roland Tellis (SBN 186269)
Mark Pifko (SBN 228412)
Michael Isaac Miller (SBN 266459)
BARON & BUDD, P.C.
15910 Ventura Boulevard, Suite 1600
Telephone: (818) 839-2333
Facsimile: (818) 986-9698
Philip F. Cossich, Jr. (to be admitted pro hac vice)
David A. Parsiola (to be admitted pro hac vice)
COSSICH, SUMICH, PARSIOLA & TAYLOR, L.L.C.
8397 Highway 23, Suite 100
Belle Chasse, Louisiana 70037
Telephone: (504) 394-9000
Facsimile: (504) 394-9110
Attorneys for Plaintiff
similarly situated
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DEMAND FOR JURY TRIAL
Plaintiff hereby demands a trial of his claims by jury to the extent authorized by
law.
Dated: November 5, 2014
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BARON & BUDD, P.C.

By: /s/ Mark Pifko
Mark Pifko
Daniel Alberstone (SBN 105275)
Roland Tellis (SBN 186269)
Mark Pifko (SBN 228412)
Michael Isaac Miller (SBN 266459)
BARON & BUDD, P.C.
15910 Ventura Boulevard, Suite 1600
Telephone: (818) 839-2333
Facsimile: (818) 986-9698
Philip F. Cossich, Jr. (to be admitted pro hac vice)
David A. Parsiola (to be admitted pro hac vice)
COSSICH, SUMICH, PARSIOLA & TAYLOR, L.L.C.
8397 Highway 23, Suite 100
Belle Chasse, Louisiana 70037
Telephone: (504) 394-9000
Facsimile: (504) 394-9110
Attorneys for Plaintiff
similarly situated
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B18 (Official Form 18)(12/07)
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Page 1 of 2
United States Bankruptcy Court

District of New Mexico
Case No. 1011558j7
Chapter 7
In re: Debtor(s) (name(s) used by the debtor(s) in the last 8 years, including married, maiden, trade, and address):
Philip B. Stone
Charlotte A. Stone
P.O. Box 2626
P.O. Box 2626
Santa Fe, NM 87504
Santa Fe, NM 87504
Last four digits of Social Security or other
Individual TaxpayerIdentification No(s)., (if any):
xxxxx5986
xxxxx6044
Employer's TaxIdentification No(s)., /Other No(s) (if any):
DISCHARGE OF DEBTOR
It appearing that the debtor is entitled to a discharge,
IT IS ORDERED:
The debtor is granted a discharge under section 727 of title 11 United States Code (the Bankruptcy Code).
BY THE COURT
Dated: 7/19/10
Robert H. Jacobvitz
United States Bankruptcy Judge
SEE THE BACK OF THIS ORDER FOR IMPORTANT INFORMATION.
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EXPLANATION OF BANKRUPTCY DISCHARGE

IN A CHAPTER 7 CASE
This court order grants a discharge to the person named as the debtor. It is not a dismissal of the case and it
does not determine how much money, if any, the trustee will pay to creditors.
Collection of Discharged Debts Prohibited
The discharge prohibits any attempt to collect from the debtor a debt that has been discharged. For example, a
creditor is not permitted to contact a debtor by mail, phone, or otherwise, to file or continue a lawsuit, to attach wages
or other property, or to take any other action to collect a discharged debt from the debtor. [In a case involving
community property: There are also special rules that protect certain community property owned by the debtor's
spouse, even if that spouse did not file a bankruptcy case.] A creditor who violates this order can be required to pay
damages and attorney's fees to the debtor.
However, a creditor may have the right to enforce a valid lien, such as a mortgage or security interest, against
the debtor's property after the bankruptcy, if that lien was not avoided or eliminated in the bankruptcy case. Also, a
debtor may voluntarily pay any debt that has been discharged.
Debts That are Discharged
The chapter 7 discharge order eliminates a debtor's legal obligation to pay a debt that is discharged. Most, but
not all, types of debts are discharged if the debt existed on the date the bankruptcy case was filed. (If this case was
begun under a different chapter of the Bankruptcy Code and converted to chapter 7, the discharge applies to debts
owed when the bankruptcy case was converted.)
Debts That are Not Discharged.
Some of the common types of debts which are not discharged in a chapter 7 bankruptcy case are:
a. Debts for most taxes;
b. Debts incurred to pay nondischargeable taxes;
c. Debts that are domestic support obligations;
d. Debts for most student loans;
e. Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
f. Debts for personal injuries or death caused by the debtor's operation of a motor vehicle, vessel, or aircraft
while intoxicated;
g. Some debts which were not properly listed by the debtor;
h. Debts that the bankruptcy court specifically has decided or will decide in this bankruptcy case are not
discharged;
i. Debts for which the debtor has given up the discharge protections by signing a reaffirmation agreement in
compliance with the Bankruptcy Code requirements for reaffirmation of debts; and
j. Debts owed to certain pension, profit sharing, stock bonus, other retirement plans, or to the Thrift Savings
Plan for federal employees for certain types of loans from these plans.
This information is only a general summary of the bankruptcy discharge. There are exceptions to these
general rules. Because the law is complicated, you may want to consult an attorney to determine the exact
effect of the discharge in this case.
Case 10-11558-j7
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Print USCA Case #14-5265
Outlook.com Print Message
Document #1535317
Filed: 02/01/2015
Page 1 of 5
Close
Ocwen is violating the consent decree Case No 13-cv-02025

From: Leo Stoller (ldms4@hotmail.com)
Sent: Wed 10/01/14 11:45 AM
To: lucy.morris@cfpb.gov (lucy.morris@cfpb.gov); jeremy.shorbe@azag.gov
(jeremy.shorbe@azag.gov); sellis@atg.state.il.us (sellis@atg.state.il.us); cara.petersen@cfpb.gov
(cara.petersen@cfpb.gov); kirsten.ivey-colson@cfpb.gov (kirsten.ivey-colson@cfpb.gov);
jstump@law.ga.gov (jstump@law.ga.gov)
Cc: William.Erbey@Ocwen.com (william.erbey@ocwen.com); ronald.faris@ocwen.com
(ronald.faris@ocwen.com); ronald.korn@ocwen.com (ronald.korn@ocwen.com);
william.lacy@ocwen.com (william.lacy@ocwen.com); wilbur.ross@ocwen.com
(wilbur.ross@ocwen.com); robert.salcetti@ocwen.com (robert.salcetti@ocwen.com);
barry.wish@ocwen.com (barry.wish@ocwen.com); timothy.hayes@ocwen.com
(timothy.hayes@ocwen.com)
15 attachments
wilcox complaint.doc (79.0 KB) , Letter to Ocwen.odt (27.5 KB) , William B. Shepro2
complaint.doc (79.0 KB) , Consumer Complaint Form _ Arizona Attorney General.pdf (80.8
KB) , Affidavit Release Reconveyance.pdf (57.0 KB) , Exhibit 2 Liz Pendens Objection 8-914.odt (29.3 KB) , Objection2 to trustee Sale.odt (32.1 KB) , email to Patel 8-15-14.pdf (118.5
KB) , Letter to WPAI.odt (32.8 KB) , wilcox email 8-16-14.pdf (447.6 KB) , Order of
Discharge.pdf (17.8 KB) , 112th way forclosure (1).pdf (164.2 KB) , Philip Bankruptcy
schedules.pdf (307.7 KB) , Receipt 8-14-14 collection complaint.pdf (119.2 KB) , 8-14-14 debt
collection complaint.pdf (164.7 KB)
Lucy Morris cfbp Deputy Director
Cara M. Petersen
Kirsten A. Ivey-Colson
Matthew F. Linter, Director Consumer Protection Div.
Jeffrey W. Stump, AG Georgia Department of Law jstump@law.ga.gov
Susan N. Ellis, Chief, Consumer Fraud, AG Illinois
Re: Ocwen violation of the Consent Decree, continuing to file fraudulent Notice(s) of Trustee Sales See
attached documents.
Dear Ms. Lucy Morris

Ocwen is violating the consent decree Case No. 13-cv-02025. Ocwen has caused to be filed a fraudulent
Notice of Trustee Sale (Nov. 12,2014) on my family home located Scottsdale Arizona.
Ocwen and its third party agents Western Progressive Arizona, Inc., are attempting to foreclose on my family
home in which I do not owe any money. Ocwen through its third party agent has filed a fraudulent Notice of
https://blu173.mail.live.com/ol/mail.mvc/PrintMessages?mkt=en-us
(Page 269 of Total)

1/5
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Case
Document
Filed: is02/01/2015
Page
2 of 5 owner,
TrusteeUSCA
Sale with
the #14-5265
Arizona Maracopa
Counter#1535317
Recorders office which
attached, against
the former
Philip Stone, of the said real estate, who's debts were discharged in bankruptcy.
Ocwen is in complete violation of the consent decree which is evidences by their latest Notice of Trustee Sale
documents which are attached. Ocwen is in contempt of court by the said filing.
I have contacted Ocwen, their third party agents, their attorneys, Robert R. Maddox, J.Riley Key, who are
aidding and abetting, Ocwen in their wrongful conduct (Thornwood, Inc. v. Jenner & Block, 799 N.E.2d 756
(Ill. App. Ct. 2003)) and Indirect Criminal Contempt of a criminal (Rule 42(b) is not to be tested by the more
stringent standards set for an indictment. See Bullock v. United States, 265 F.2d 683, 691-92 (6th
Cir.), cert. denied, 360 U.S. 909 (1959)).
I have demanded that Ocwen and its attorneys Robert R. Maddox, J.Riley Key, take the necessary
remedial action and withdraw the Notice of Trustee Sale for November 12, 2014 and Ocwen and their
attorneys have thus far refused in violation of the said consent decree. . I have filed attorney disciplinary
complaints against their lawyers in Florida. See attached.
The Alabama Bar has advised me that if Ocwen's attorneys Robert R. Maddox, J.Riley Key do not
immediately take the necessary remedial action to advise their client Ocwen to issue a
letter permanently rescinding the Notice of Trustee Sale attached hereto, the Alabama bar will
seek disciplinary action against Robert R. Maddox, J.Riley Key and the Georgia Bar will seek
disciplinary action against Timothy M. Hayes, General Counsel to Ocwen.
I have contacted Office of Mortgage Settlement Oversight, Monitor Joseph Smith, who informed me
that I should contact your Office of the Consumer Financial Protection Bureau and make them aware of
Ocwen's violation of the consent decree, evidence by the attached fraudulent Notice of trustee Sale. Mr. Smith
also directed me to the respective State Attorney Generals who have an interest in Ocwen's violating the consent
decree.
I am requesting that you direct a letter immediately to Ocwen, its officers and directors demanding that Ocwen
issue a letter to Christopher Stoller advising that the Notice of Trustee Sale set for November 12, 2014 is
permanently vacated otherwise we will be forced to file a Petition for Indirect Criminal Contempt against all of
the officers, directors and attorneys who represent Ocwen (a criminal contempt petition filed under Rule 42(b) is
not to be tested by the more stringent standards set for an indictment. See Bullock v. United States, 265 F.2d
683, 691-92 (6th Cir.), cert. denied, 360 U.S. 909 (1959).
Please respond by October 5th, 2014.
Most Cordially,
/s/ Christopher Stoller

6045 W. Grand Avenue Apt 414
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IllinoisCase
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Document #1535317
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312-834-9717
email Ldms4@hotmail.com
cc:
Timothy Hayes timothy.hayes@ocwen.com
General Counsel
1661 Worthington Road, Suite 100
cc: William C. Erbey, Executive Chairman, Ocwen Board of Directors

Ronald M. Faris, Ocwen Board of Directors ronald.faris@ocwen.com
Ronald J. Korn, Ocwen Board of Directors ronald.korn@ocwen.com
William H. Lacy, Ocwen Board of Directors william.lacy@ocwen.com
Wilbur L. Ross, Jr., Ocwen Board of Directors wilbur.ross@ocwen.com
Robert A. Salcetti, Ocwen Board of Directors robert.salcetti@ocwen.com
Barry N. Wish, Ocwen Board of Directors barry.wish@ocwen.com
Mitra Hormozi, Zuckerman Spaeder LLP
James Sottile, Zuckerman Spaeder LLP
________________________________________________________________________
From: info@mortgageoversight.com
To: ldms4@hotmail.com
Subject: RE: Ocwen is violating the consent decree Case No 13-cv-02025
Date: Wed, 1 Oct 2014 13:05:31 +0000
Mr. Stoller:
Thank you for your email. The Office of Mortgage Settlement Oversight has been created to assist Monitor
Joseph Smith in his court-appointed role to oversee the participating banks compliance with the national mortgage
settlement (NMS). The Monitors role is dictated by Exhibit D of the Consent Judgments with Ocwen and,
unfortunately, we are unable to intervene on behalf of individual homeowners. However, there are some
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resources
available
to #14-5265
help homeowners
and your #1535317
best option would beFiled:
to continue
working with
your4 states
Attorney General. In addition, you may also contact the Consumer Financial Protection Bureau at
http://www.consumerfinance.gov or 855-411-2372.
Thank you.
Office of Mortgage Settlement Oversight

P.O. Box 2091
Raleigh, NC 27602
(919)825-4748
From: ldms4@hotmail.com
To: info@mortgageoversight.com
CC: lucy.morris@cfpb.gov; jeremy.shorbe@azag.gov; gary.tan@dc.gov
Subject: Ocwen is violating the consent decree Case No 13-cv-02025
Date: Mon, 29 Sep 2014 17:33:01 -0500
:Joseph
A. Smith Jr

301 Fayetteville St., Suite 1801
Raleigh, NC 27601
Phone: 919-825-4748
Email: info@mortgageoversight.com
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#1535317
Re: Ocwen
is violating
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in Case
No. 13-cv-0202Filed: 02/01/2015
Page 5 of 5
Mr. Smith
Ocwen caused a fraudulent Notice of Trustee Sale of my family home in Scottsdale Arizona. I have advised
Ocwen and their third party representatives to immediately withdraw the Notice of Trustee Sale scheduled for
November 12, 2014 see attached documents, notices of complaints, attorney disciplinary complaints etc.
Please direct Ocwen to vacate the said Notice of Trustee Sale which is scheduled for Nov. 12, 2014 see
attached. The said notice of Trustee Sale is a fraudulent document filed with the Maricopa County Recorders
Office in clear violations of numerous terms of the said consent decree which Ocwen signed and you are
responsible for enforcing. The accompanying documents support my claims. I need you help to enforce the
Consent Decree against Ocwen, because they have ignored all of my correspondence.
If you need any other documents, please call me 312-283-9717
Most Cordially,
Christopher Stoller
6045 w Grand Ave Apt 414
Chicago, Illinois 60639
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Must Have Promissory Note Cases
Filed: 02/01/2015
Page 1 of 3
McCay v. Capital Resources Company, LTD. 96-200 S.W.2d 1997

Where appellee apparently never possessed appellants' original note as provided in Ark. Code
Ann. 4-3-309(a)(i) (Repl. 1991), but was required, even if it had, to have proven all three
factors specified in 4-3-309(a) and did not do so, appellee could not enforce the original note's
terms by the use of a copy; even if all three requirements in 4-3-309(a) had been proven, the
trial court was still obligated to ensure that appellee provided adequate protection to the
appellants from any future claim, and this, too, was not done. First, as previously discussed, we
mention the unfairness in these circumstances that, if a duplicate was allowed in place of the
original note, the McKays could later be subjected to double liability if the actual holder of the
note appeared. Next, we add that the Rules of Evidence are rules of the court involving legal
proceedings, while the UCC is composed of statutes of law that established the rights and
liabilities of persons. Again, as previously discussed, Capital Resources, as an assignee of the
McKays' note, could not sue on the underlying debt the McKays owed to Landmark Savings. For
Capital Resources to have prevailed in enforcing the McKays' note, it was required either to
produce the original or satisfy the requirements for a lost negotiable instrument under 4-3309(a) and (b). Because Capital failed to do either, we must reverse and remand.
Mortgage Securities Inc. v. Hartley Lord. No. 4D02-4051. July 23, 2003
Mortgagee by assignment brought foreclosure action. The Circuit Court, 15th Judicial Circuit,
Palm Beach County, Edward Fine and John Wessel, JJ., entered summary judgment for
mortgagor. Mortgagee appealed. The District Court of Appeal, Stone, J., held that mortgagee
could not maintain cause of action to enforce missing promissory note or foreclose mortgage, in
absence of proof that mortgagee or assignor ever had possession of note.
Lorraine C. Tillman v. Virginia Savage Smith (07/25/85)
The purpose of the section is well expressed by commentator Carl W. Ehrhardt as follows: [21]
The drafters of the Code excluded from the general rule of admissibility of duplicates these
documents because the possessor of the documents is the owner of the obligation that they
represent and the party who may bring a cause of action based on the document. Therefore, the
person who possesses the duplicate may not possess the cause of action. For example, if A
makes a xerox copy of a promissory note and subsequently negotiates the original to B, under
section 90.953(1), A, the transferor, is not able to sue on the xerox copy of the promissory note.
[22] Ehrhardt, Florida Evidence 953.1 (2d ed. 1984). See also Lowery v. State, 402 So.2d
1287 (Fla. 5th DCA 1981). To fall under section 90.953(1), the agreement would have not only
to evidence a right to the payment of money, but be "of a type that is transferred by delivery in
the ordinary course of business with any necessary endorsement or assignment" (emphasis
added).
Mason v. Rubin, 727 So.2d 283, 37 UCC Rep.Serv.2d 1087 (Fla.App. Dist.4
02/10/1999)
Establishing a lost negotiable instrument is governed by a different statute, section 673.3091,
Florida Statutes (1993). The latter statute contains more stringent requirements than the
former, and the trial court correctly concluded that the husband did not satisfy section 673.3091
Figueredo v. Bank Espirito Santo No. 88-1808.Jan. 31, 1989. FL Third District.
The plaintiff failed to produce for admission into evidence the original copy of a negotiable
promissory instrument as is expressly required by section 90.953(1), Florida Statutes (1987).
For this reason, the final judgment of foreclosure is vacated with directions for the trial court to
receive the original promissory note in evidence
Promissory Note Cases
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SMS Financial LLc. v. Abco Homes, Inc. No.98-50117 February 18, 1999 (167 F. 3d.
235; 5th Circuit Court of Appeals.)
Where the complaining party can not prove the existence of the note, then there is no note. To
recover on a promissory note, the plaintiff must prove: (1) the existence of the note in question;
(2) that the party sued signed the note; (3) that the plaintiff is the owner or holder of the note;
and (4) that a certain balance is due and owing on the note. Since no one is able to produce the
instrument there is no competent evidence before the Court that any party is the holder of the
alleged note or the true holder in due course. New Jersey common law dictates that the plaintiff
prove the existence of the alleged note in question, prove that the party sued signed the alleged
note, prove that the plaintiff is the owner and holder of the alleged note, and prove that certain
balance is due and owing on any alleged note. Federal Circuit Courts have ruled that the
only way to prove the perfection of any security is by actual possession of the security.
See; Matter of Staff Mortg. & Inv. Corp., 550 F.2d 1228 (9th Cir 1977), Under the Uniform
Commercial Code, the only notice sufficient to inform all interested parties that a
security interest in instruments has been perfected is actual possession by the secured
party, his agent or bailee. Bankruptcy Courts have followed the Uniform Commercial Code.
In Re Investors & Lenders, Ltd. 165 B.R. 389 (Bkrtcy.D.N.J.1994), Unequivocally the Courts
rule is that in order to prove the instrument, possession is mandatory. In addition to
the note, another element of proof is necessary an accounting that is signed and
dated by the person responsible for the account. Claim of damages, to be admissible
as evidence, must incorporate records such as a general ledger and accounting of an
alleged unpaid promissory note, the person responsible for preparing and maintaining
the account general ledger must provide a complete accounting which must be sworn
to and dated by the person who maintained the ledger. See Pacific Concrete F.C.U. V.
Kauanoe, 62 Haw. 334, 614 P.2d 936 (1980), GE Capital Hawaii, Inc. v. Yonenaka 25 P.3d 807,
96 Hawaii 32, (Hawaii App 2001), Fooks v. Norwich Housing Authority 28 Conn. L. Rptr. 371,
(Conn. Super.2000), and Town of Brookfield v. Candlewood Shores Estates, Inc. 513 A.2d 1218,
201 Conn.1 (1986).
See 90.953, West's Fla. Stat. Annot. (1979) (Sponsor's Note); C. Ehrhardt, Florida
Evidence 953.1, at 605 & n.5; Lowery v. State, 402 So.2d 1287, 1288-89 (Fla. 5th
DCA 1981). 90.953(1),
Florida Statutes, is misplaced. The purpose of that subsection is to require production of the
original where there is an action on a negotiable instrument. In such instances, the original
instrument must be brought forward both to demonstrate the right to payment and to preclude
the possibility that the instrument has already been negotiated.
[11] State Street sought to establish the promissory note and mortgage under section 71.011,
Florida Statutes. State Street alleged that Hartley executed the note and mortgage and that,
after multiple assignments, the documents were assigned to State Street by EMC Mortgage
Corporation. Although State Street alleged in its pleading that the original documents were
received by it, the record established that State Street never had possession of the original note
and, further, that its assignor, EMC, never had possession of the note and, thus, was not able to
transfer the original note to State Street. [12] The trial court correctly concluded that as State
Street never had actual or constructive possession of the promissory note, State Street could
not, as a matter of law, maintain a cause of action to enforce the note or foreclose the
mortgage. The right to enforce the lost instrument was not properly assigned where neither
State Street nor its predecessor in interest possessed the note and did not otherwise satisfy the
requirements of section 673.3091, Florida Statutes, at the time of the assignment. See Slizyk v.
Page 2 of 3
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Smilack, 825 So. 2d 428, 430 (Fla. 4th DCA 2002). In Mason v. Rubin, 727 So. 2d 283 (Fla. 4th
DCA 1999), the appellant brought a foreclosure action on a second mortgage, the trial court
denied the foreclosure, and this court affirmed on the basis that the appellant had failed to
establish the lost note under section 673.3091. Likewise, here, where State Street failed to
comply with section 673.3091, the trial court correctly entered summary judgment denying its
foreclosure claim. *fn1 In contrast, here, the undisputed evidence was that EMC, the assignor,
never had possession of the notes and, thus, could not enforce the note under section 673.3091
governing lost notes. Because EMC could not enforce the lost note under section 673.3091, it
had no power of enforcement which it could assign to State Street.
Raymond E. Shores and Marcene G. Shores v. First Florida Resource Corporation
(10/11/72) Appellants are entitled to assurance that they will not later be sued by a holder of
these instruments. If there are parties having any claim to these instruments they should be
brought into the action and the matter determined. The instruments should then be
reestablished, recorded and an appropriate judgment entered.
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Page 1 of 9
Close
RE: Ocwen is violating the consent decree Case No 13-cv-02025

From: Ombudsman (Ombudsman3@ocwen.com)
Sent: Thu 10/16/14 4:27 PM
To: ldms4@hotmail.com (ldms4@hotmail.com)
3 attachments
Stone Adjustable Rate Note.pdf (449.8 KB) , Stone Deed of Trust.pdf (1437.4 KB) , Stone
Ocwen PRH.pdf (12.3 KB)
Dear Christopher Stoller:

Ocwen Loan Servicings office of the CEO and President acknowledges receipt of your e-mail
correspondence dated October 1, 2014. As the Consumer/Customer Advocate, the Office of the
Ombudsman welcomes the opportunity to respond to your inquiry.
Attached are copies of the signed original Adjustable Rate Note and Deed of Trust signed by Mr.
Philip B. Stone indicating that the loan originated on May 2, 2006, with Countrywide Bank, N.A.
Ocwen commenced servicing this loan from Bank of America (BOA) on September 8, 2012, with
the last payment satisfied on the loan being February 1, 2008 payment.
Please be advised that Quit Claim Deed only transfers the title of the property to the person named
in the deed but it does not relinquish the person who signed the Adjustable Rate Note from their
responsibilities to a lender. However, please note that you did not sign the original collateral
documents.
A review of the loan indicates that Mr. Stone filed for protection under Bankruptcy Chapter 7 on
March 30, 2010, which was eventually discharged on July 19, 2010. As the bankruptcy has been
discharged, Mr. Stone is no longer personally liable for the debt. However, this is still a valid lien
and Ocwen may foreclose its security interest in the Real Property under the terms of the original
loan documents if the required payments are not received in a timely manner.
Please note foreclosure proceedings can be initiated if the loan is delinquent by three (3) or more
payment. Consequently, foreclosure proceedings were initiated on the loan on February 21, 2014; at
that time last payment satisfied on the loan was February 1, 2008 payment.
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Attached for your review is the Ocwen Payment Reconciliation History (PRH), which indicates that
Ocwen has not received any payments on the loan since they commenced servicing of the loan and
the resulting loan status.
In order to permanently remove Mr. Stones name from the loan, you may opt to either refinance or
assume the loan. In order to confirm if the loan is assumable and request for an Assumption
Package, you may send in a written request along with a clear copy of the Driver's License to the
fax number at (407) 737-5802. Please note that Ocwen is not in a position to refinance the loans
directly. However, you may wish to approach other financial institutions, in order to refinance the
loan or if required you may contact Ocwens Customer Care Center at (800) 746-2936 for further
assistance regarding this matter.
As of the date of this email, the last payment satisfied on the loan is the February 1, 2008 payment.
The foreclosure is presently on hold. Please note Ocwen will continue to service the loan according
to the terms and conditions of the signed loan documents in order to protect its lien position and
interest in the property.
If you and/or Mr. Stone require any further assistance regarding the loan, you may contact Ocwens
Customer Care Center.
The Office of the Consumer Ombudsman is an advocate in ensuring that Ocwen's servicing of the
loan remains fair, reasonable and proper. If you still have unresolved issues, please feel free to
contact this Office at (800) 390-4656.
Sincerely,
Nilekha Ghate
Consumer Account Analyst
Office of the Consumer Ombudsman
Ocwen Loan Servicing, LLC
(Page 308 of Total)

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NMLS#1852
Document #1535317
Filed: 02/01/2015
Page 3 of 9
Please Note: This is an attempt to collect a debt and any information obtained will be used for that purpose. However, if
you have an active bankruptcy case or have received an Order of Discharge from a Bankruptcy Court, the following
Notice Regarding Bankruptcy applies.
Notice Regarding Bankruptcy: Please be advised that if you are part of an active Bankruptcy case or if you have
received an Order of Discharge from a Bankruptcy Court, this letter is in no way an attempt to collect either a prepetition, post petition or discharged debt. If your bankruptcy case is still active, no action will be taken in willful
violation of the Automatic Stay. If you have received an Order of Discharge in a Chapter 7 case, any action taken by us
is for the sole purpose of protecting our lien interest in the underlying mortgaged property and is not an attempt to
recover any amounts from you personally. Finally, if you are in an active Chapter 11, 12 or 13 bankruptcy case and an
Order for Relief from the Automatic Stay has not been issued, you should continue to make payments in accordance
with your plan.
P.O. Box 785061, Orlando, FL 32878-5061

Telephone: (800) 390-4656
Fax: (866) 771-5152
NMLS # 1852
From: Faris, Ronald

Sent: Wednesday, October 01, 2014 1:23 PM
Subject: Fwd: Ocwen is violating the consent decree Case No 13-cv-02025
Sent from my iPad

Begin forwarded message:
From: "Leo Stoller" <ldms4@hotmail.com>
To: "lucy.morris@cfpb.gov" <lucy.morris@cfpb.gov>, "jeremy.shorbe@azag.gov"
<jeremy.shorbe@azag.gov>, "sellis@atg.state.il.us" <sellis@atg.state.il.us>,
(Page 309 of Total)

3/9
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USCA"cara.petersen@cfpb.gov"
Case #14-5265
Document
#1535317
Filed:
02/01/2015
<cara.petersen@cfpb.gov>,
"kirsten.ivey-
Page 4 of 9
colson@cfpb.gov" <kirsten.ivey-colson@cfpb.gov>, "jstump@law.ga.gov"

<jstump@law.ga.gov>
Cc: "Erbey, William" <William.Erbey@ocwen.com>, "Faris, Ronald"
<Ronald.Faris@ocwen.com>, "ronald.korn@ocwen.com"
<ronald.korn@ocwen.com>, "william.lacy@ocwen.com"
<william.lacy@ocwen.com>, "wilbur.ross@ocwen.com"
<wilbur.ross@ocwen.com>, "robert.salcetti@ocwen.com"
<robert.salcetti@ocwen.com>, "barry.wish@ocwen.com"
<barry.wish@ocwen.com>, "Hayes, Timothy M" <Timothy.Hayes@ocwen.com>
Lucy Morris cfbp Deputy Director
Cara M. Petersen
Kirsten A. Ivey-Colson
Matthew F. Linter, Director Consumer Protection Div.
Jeffrey W. Stump, AG Georgia Department of Law jstump@law.ga.gov
Susan N. Ellis, Chief, Consumer Fraud, AG Illinois
Re: Ocwen violation of the Consent Decree, continuing to file fraudulent Notice(s) of
Trustee Sales See attached documents.
Dear Ms. Lucy Morris

Ocwen is violating the consent decree Case No. 13-cv-02025. Ocwen has caused
to be filed a fraudulent Notice of Trustee Sale (Nov. 12,2014) on my family home
located Scottsdale Arizona.
Ocwen and its third party agents Western Progressive Arizona, Inc., are attempting
to foreclose on my family home in which I do not owe any money. Ocwen through
its third party agent has filed a fraudulent Notice of Trustee Sale with the Arizona
Maracopa Counter Recorders office which is attached, against the former owner,
Philip Stone, of the said real estate, who's debts were discharged in bankruptcy.
Ocwen is in complete violation of the consent decree which is evidences by their
latest Notice of Trustee Sale documents which are attached. Ocwen is in contempt
of court by the said filing.
I have contacted Ocwen, their third party agents, their attorneys, Robert R.
Maddox, J.Riley Key, who are aidding and abetting, Ocwen in their wrongful
conduct (Thornwood, Inc. v. Jenner & Block, 799 N.E.2d 756 (Ill. App. Ct.
2003)) and Indirect Criminal Contempt of a criminal (Rule 42(b) is not to be tested
by the more stringent standards set for an indictment. See Bullock v. United States,
265 F.2d 683, 691-92 (6th Cir.), cert. denied, 360 U.S. 909 (1959)).
I have demanded that Ocwen and its attorneys Robert R. Maddox, J.Riley Key,
(Page 310 of Total)

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Filed: 02/01/2015
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necessary remedial
action#1535317
and withdraw the Notice
of Trustee Sale for
November 12, 2014 and Ocwen and their attorneys have thus far refused in
violation of the said consent decree. . I have filed attorney disciplinary complaints
against their lawyers in Florida. See attached.
The Alabama Bar has advised me that if Ocwen's attorneys Robert R. Maddox,
J.Riley Key do not immediately take the necessary remedial action to advise their
client Ocwen to issue a letter permanently rescinding the Notice of Trustee Sale
attached hereto, the Alabama bar will seek disciplinary action against Robert R.
Maddox, J.Riley Key and the Georgia Bar will seek disciplinary action against
Timothy M. Hayes, General Counsel to Ocwen.
I have contacted Office of Mortgage Settlement Oversight, Monitor Joseph Smith,
who informed me that I should contact your Office of the Consumer Financial
Protection Bureau and make them aware of Ocwen's violation of the consent
decree, evidence by the attached fraudulent Notice of trustee Sale. Mr. Smith also
directed me to the respective State Attorney Generals who have an interest in
Ocwen's violating the consent decree.
I am requesting that you direct a letter immediately to Ocwen, its officers and
directors demanding that Ocwen issue a letter to Christopher Stoller advising that the
Notice of Trustee Sale set for November 12, 2014 is permanently vacated
otherwise we will be forced to file a Petition for Indirect Criminal Contempt against
all of the officers, directors and attorneys who represent Ocwen (a criminal contempt
petition filed under Rule 42(b) is not to be tested by the more stringent standards set
for an indictment. See Bullock v. United States, 265 F.2d 683, 691-92 (6th Cir.),
cert. denied, 360 U.S. 909 (1959).
Please respond by October 5th, 2014.
Most Cordially,
/s/ Christopher Stoller

6045 W. Grand Avenue Apt 414
312-834-9717
email Ldms4@hotmail.com
(Page 311 of Total)

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Page 6 of 9
cc:
Timothy Hayes timothy.hayes@ocwen.com
General Counsel
1661 Worthington Road, Suite 100
cc: William C. Erbey, Executive Chairman, Ocwen Board of Directors

Ronald M. Faris, Ocwen Board of Directors ronald.faris@ocwen.com
Ronald J. Korn, Ocwen Board of Directors ronald.korn
@ocwen.com
William H. Lacy, Ocwen Board of Directors william.lacy
@ocwen.com
Wilbur L. Ross, Jr., Ocwen Board of Directors wilbur.ross@ocwen.com
Robert A. Salcetti, Ocwen Board of Directors robert.salcetti@ocwen.com
Barry N. Wish, Ocwen Board of Directors barry.wish@ocwen.com
Mitra Hormozi, Zuckerman Spaeder LLP
James Sottile, Zuckerman Spaeder LLP
________________________________________________________________________
From: info@mortgageoversight.com
To: ldms4@hotmail.com
Subject: RE: Ocwen is violating the consent decree Case No 13-cv-02025
Date: Wed, 1 Oct 2014 13:05:31 +0000
Mr. Stoller:
Thank you for your email. The Office of Mortgage Settlement Oversight has been
created to assist Monitor Joseph Smith in his court-appointed role to oversee the
participating banks compliance with the national mortgage settlement (NMS). The
Monitors role is dictated by Exhibit D of the Consent Judgments with Ocwen and,
unfortunately, we are unable to intervene on behalf of individual homeowners.
However, there are some resources available to help homeowners and your best
option would be to continue working with your states Attorney General. In addition,
you may also contact the Consumer Financial Protection Bureau at
http://www.consumerfinance.gov or 855-411-2372.
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Page 7 of 9
Thank you.
________________________________
P.O. Box 2091
Raleigh, NC 27602
(919)825-4748
________________________________
From: ldms4@hotmail.com
To: info@mortgageoversight.com
CC: lucy.morris@cfpb.gov; jeremy.shorbe@azag.gov; gary.tan@dc.gov
Date: Mon, 29 Sep 2014 17:33:01 -0500
:Joseph A. Smith Jr<http://nationalmortgageprofessional.com/joseph-smith-jr>

301 Fayetteville St., Suite 1801
Raleigh, NC 27601
Phone: 919-825-4748
Email: info@mortgageoversight.com<mailto:info@mortgageoversight.com>
Re: Ocwen is violating the Consent decree in Case No. 13-cv-0202
(Page 313 of Total)

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#14-5265
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Ocwen caused a fraudulent Notice of Trustee Sale of my family home in Scottsdale

Arizona. I have advised Ocwen and their third party representatives to immediately
withdraw the Notice of Trustee Sale scheduled for November 12, 2014 see
attached documents, notices of complaints, attorney disciplinary complaints etc.
Please direct Ocwen to vacate the said Notice of Trustee Sale which is scheduled
for Nov. 12, 2014 see attached. The said notice of Trustee Sale is a fraudulent
document filed with the Maricopa County Recorders Office in clear violations of
numerous terms of the said consent decree which Ocwen signed and you are
responsible for enforcing. The accompanying documents support my claims. I need
you help to enforce the Consent Decree against Ocwen, because they have ignored
all of my correspondence.
If you need any other documents, please call me 312-283-9717
Most Cordially,
Christopher Stoller
6045 w Grand Ave Apt 414
<wilcox complaint.doc>
<Letter to Ocwen.odt>
<William B. Shepro2 complaint.doc>
<Consumer Complaint Form _ Arizona Attorney General.pdf>
<Affidavit Release Reconveyance.pdf>
<Exhibit 2 Liz Pendens Objection 8-9-14.odt>
<Objection2 to trustee Sale.odt>
<email to Patel 8-15-14.pdf>
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Case to
#14-5265
WPAI.odt>Document #1535317
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<wilcox email 8-16-14.pdf>

<Order of Discharge.pdf>
<112th way forclosure (1).pdf>
<Philip Bankruptcy schedules.pdf>
<Receipt 8-14-14 collection complaint.pdf>
<8-14-14 debt collection complaint.pdf>
******************************************************************************************
This E-mail message and any attachments are intended solely for the use of the addressee hereof and may contain information that is confidential,
privileged and/or exempt from disclosure under applicable law. Delivery of this message to any person other than the intended recipient shall not
constitute a waiver of any right, privilege or exemption. If you are not the intended recipient, please immediately notify the sender by reply E-mail and
permanently delete this message from your system without reproducing or disclosing it to any third party. While Ocwen Financial Corporation and its
subsidiaries take reasonable precautions to prevent transmission of software viruses, we cannot guarantee the same and we therefore disclaim liability for
any damage sustained by you or any third party as a result thereof
******************************************************************************************
******************************************************************************************
This E-mail message and any attachments are intended solely for the use of the addressee hereof and may contain information that is confidential,
privileged and/or exempt from disclosure under applicable law. Delivery of this message to any person other than the intended recipient shall not
constitute a waiver of any right, privilege or exemption. If you are not the intended recipient, please immediately notify the sender by reply E-mail and
permanently delete this message from your system without reproducing or disclosing it to any third party. While Ocwen Financial Corporation and its
subsidiaries take reasonable precautions to prevent transmission of software viruses, we cannot guarantee the same and we therefore disclaim liability for
any damage sustained by you or any third party as a result thereof
******************************************************************************************
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John T. Grenie Charged With Indirect Criminal Contempt

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/s/ Steven N. Taieb, Esq.

Doc 1-1 Filed 10/16/08 Entered 10/16/08 11:03:22 Desc

USCA Case #14-5265

IN THE UNITED STATES BANKRUPTCY COURT

Bankruptcy No. 08-18700

Adversary No. 08-02448

Camden, New Jersey

BRUCE LEVITT, ESQUIRE

For the Defendant:

HAROLD KAPLAN, ESQUIRE

USCA Case #14-5265

DIANA DOMAN TRANSCRIBING SERVICES

Proceedings recorded by electronic sound recording, transcript

USCA Case #14-5265

LINDA DeMARTINI, DEFENSE WITNESS, SWORN

Your full name,

first and last, and spell your last name, please.

Please have a seat.

My name is Linda DeMartini.

name is spelled D-E capital M-A-R-T-I-N-I.

I am employed by Bank of America Home Loans, formally

known as Countrywide Home Loans.

A total of almost ten years.

And what is your position there?

I am an operational team leader for the Litigation

Management Department currently.

documents, whos presently the owner, holder, transferee of

New York, and we -- we are the servicer, Bank of America Home

Loan, Servicing, LP, formally known as Countrywide Home Loan

And how long have you been employed there?

Ive been there just about a

Are you familiar with the documents relating to Mr. Kemps

Now who, based upon your knowledge of the loan

Well, the owner as in the investor, that would be Bank of

USCA Case #14-5265

Id like this marked as I guess D-1.

Okay, may I approach the witness, Your Honor?

Could you tell the Court what that document is?