Ocwen petitions for dismissal of HAMP lawsuit in appeals court

Ocwen Financial filed a petition for writ of mandamus in the 5th U.S. Circuit Court of Appeals to dismiss a case involving representations in loan modifications.

The appeal follows the denial of an earlier motion to dismiss the lawsuit, Eichner et al. v. Ocwen Loan Servicing, in U.S. District Court last month. 

At issue in the whistleblower case are alleged False Claims Act violations the mortgage servicer made in the context of the Department of the Treasury's Home Affordable Modification Program.

Jean-Marc Eichner is a former employee who separated from the company prior to the pandemic. He and fellow plaintiff Brandon Loyd filed their original claims under seal in July 2019, according to court documents.

In addition to Ocwen, multiple financial institutions that served as trustees for the securitized mortgages involved face allegations in the Eichner litigation. Plaintiffs allege that the trustees were "vicariously liable for the actions of the Ocwen defendants."

Ocwen Financial and several other mortgage-related entities have settled many servicing claims from the Great Recession, when a wave of distressed loans overwhelmed the market following a housing crash.

Ocwen had sought to end FCA claims from that period with a $30 million multistate settlement, but it's still litigating some issues involved with the Consumer Financial Protection Bureau in Florida, its petition shows. Those issues were carved out of that settlement.

The mortgage company's new petition asks the appeals court to dismiss the Eichner lawsuit given that the prior Fisher v. Ocwen Loan Servicing case already released the claims at issue.