Fund giants BlackRock, Pimco mull suit against Ocwen
Handling of former ResCap mortgages at issue
February 12, 2014 01:24PM
From left: Ocwen’s Ronald Faris, BlackRock’s Laurence Fink and Pimco’s Mohamed El-Erian
In an abrupt change, BlackRock and Pimco are contemplating filing suit against Ocwen Financial for improperly handling residential mortgages.
The duo supported the sale of ResCap’s $300 billion mortgage servicing portfolio to Ocwen back in 2012, after that firm went bankrupt. At the time, ResCap trustees slammed the deal with Ocwen, citing the company’s lackluster customer service record.
Now the attorney who represented the 17-member institutional investor group — including mutual fund heavyweights BlackRock and Pimco — is preparing a suit against Ocwen. The allegations? Ocwen allegedly fudged its handling of the mortgages and has not done enough to keep borrowers out of foreclosure, an unnamed source told the New York Post.
News of the suit comes on the heels of the New York State Department of Financial Services move last week to halt the transfer of $39 billion in mortgage servicing rights from Wells Fargo to Ocwen. The Atlanta-based mortgage servicer picked up the rights in January.[NYP] – Julie Strickland
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