Ocwen may need to pay more to settle robocall class action lawsuit
A judge denied the settlement terms in a Telephone Consumer Protection Act lawsuit against Ocwen Financial Corp. over concerns that the proposed $17.5 million payment was insufficient.
"As things currently stand, the court is unable to determine that the settlement that has been proposed is fair, reasonable, and adequate for the class," U.S. District Court Judge Matthew Kennelly said in a Sept. 28 order on the motion.
Plaintiffs in the class-action case, Snyder v. Ocwen Loan Servicing, alleged that Ocwen had violated the TCPA and the Fair Debt Collection Practices Act by making "debt-collection calls using an automated telephone dialing system without the call recipients' prior consent."
The judge cited concern "that there is a good chance that class counsel have sold the case short" in denying the motion.
Specifically, Kennelly was concerned about "the extent to which Ocwen's claim of relative inability to pay is supported," and about the dismissal of a separate suit plaintiffs had filed against banks that had served as trustees for class members' loans.
The case was filed in the Northern District of Illinois' Eastern Division.
The court will resume its consideration of the case next week, after the company is scheduled to close its acquisition of PHH Corp. Ocwen plans to close the deal on Oct. 4, according to a company press release issued Monday.
"We are aware of the decision, and are reviewing the court's order," an Ocwen spokesman said in an emailed statement about case.
Ocwen recently received all the regulatory approvals needed to close the transaction, although one state's was based on the company's agreement to several post-closing conditions.
The Mortgage Bankers Association has petitioned for servicer exemption from the TCPA, arguing that it conflicts with borrower contact requirements mortgage companies have.