Most Recent Posts

The fallout from the housing crisis isn't over.

According to Moody's Analytics, there were 700,000 foreclosures last year. And some of those people probably didn't need to lose their homes. Even now, more than six years after the housing crash, lawyers for homeowners say mortgage companies are still making mistakes and foreclosing on homes when they shouldn't be.

Ocwen Financial Corp. is facing an investigation by regulators and a new lawsuit over its treatment of homeowners facing foreclosures. The class-action suit alleges that Ocwen has been charging marked-up, illegal fees and unfairly pushing homeowners into foreclosure.

Ocwen, one of the nation's largest mortgage servicers, collects mortgage payments from American homeowners.

'Helping Homeowners Is What We Do'

There's some irony in Ocwen's case because for years the company claimed to be better than the country's biggest banks at avoiding foreclosures. Ocwen even trademarked the slogan "Helping homeowners is what we do!"

As a "specialty servicer," the company's executives said it had computer systems and policies that were specially designed for working with homeowners who had fallen on hard times and were having trouble paying. Since the housing crash, Ocwen's chairman, William Erbey, has become a billionaire as the company has grown.

But now regulators are investigating Ocwen — not for helping homeowners, but for hurting them.

New York state's top financial regulator, Benjamin Lawsky, recently expanded an investigation into the company. One issue: thousands of back-dated letters that made it appear that homeowners had missed their window to get help avoiding foreclosure.

Related NPR Stories

Crisis In The Housing Market

After Banks' Mistakes, Homeowners Pick Up Pieces

Goldman Agrees To Halt Mortgage Robo-Signing

Foreclosure Overhaul Comes Too Slowly For Many Homeowners

Ocwen has pledged to work with regulators and fix the back-dated letter problem. But the investigation has sent Ocwen's stock price swooning — down more than 60 percent year to date. And now there's this new lawsuit on behalf of homeowners.

'It's Robbery'

The lawsuit alleges that Ocwen has been charging marked-up and illegal fees as well as engaging in deceptive business practices.

Phyllis Nugent is one of the plaintiffs, and the lawsuit says Ocwen has been unfairly pushing her into foreclosure. "They just keep sending us bills with erroneous amounts on there and then charging us all these different fees," she says.

Nugent lives with Chad Hopkins and their two children in their house in Lewistown, Ill. He's a roofing contractor. She's a nurse. And the couple says they've always made their mortgage payment — at least until things went haywire back in 2011.

They bought the house in 2002 for about $100,000. Chad Hopkins says they could afford that. "We've lived here 12 years. We've raised our two daughters here along with two of Phyllis' sons," he says. "Not only have we lived here and paid our bills, we have dumped a bunch of money into this place."

But then in 2011, Ocwen discovered that there'd been a paperwork mix-up where some property taxes hadn't been paid a number of years back.

Documents show that Ocwen then added fees and demanded a lump sum payment of $18,000. The couple says they couldn't pay that. And they say they couldn't tell how much of that was taxes and how much was fees tacked on by Ocwen.

At that point, Ocwen refused to accept their normal monthly payments. And Nugent says the company started charging them additional fees that didn't seem to make any sense.

"They charged us fees for property preservation" when the couple was clearly still living in the house and taking care of it, she says. And Nugent says Ocwen also charged them for "force-placed insurance when we always paid our insurance with my insurance man that I've had since 1996."

When taken all together, these fees were not small. In fact, Ocwen claims the couple now owes more than they borrowed in the first place. They borrowed $98,000. But an Ocwen bill cited in the lawsuit claims the couple now owes $150,000 despite a decade of making their mortgage payments.

When they'd call to try to sort all of this out, Nugent and Hopkins say, Ocwen routed them to a call center in India. They say they couldn't get their questions answered. And they were told to just pay the bill.

"We still get bills saying we owe outrageous amounts," Hopkins says.

Meanwhile, Ocwen is now moving to foreclose on their house. "Oh, yeah," Hopkins says, "they've sent foreclosure notices and they've filed here at the federal courthouse in Peoria, Ill."

Gary Klein is one of the lead attorneys representing the homeowners in the case, which has been filed in a federal court in Florida and is seeking class-action status.

Klein says there's a pattern. It usually starts with a small, fixable problem — a mix-up with an escrow account, or a homeowner misses a few payments.

"People have a relatively small and manageable default, something that they could correct, but because Ocwen adds charges in such large amounts, the problem becomes almost unsolvable," Klein says.

The lawsuit alleges that some of those fees Ocwen is charging are illegal. It says Ocwen charged Nugent and Hopkins late fees that it wasn't permitted to charge under the terms of the mortgage. The suit says Ocwen also forced upon the couple a second insurance policy through one of its own affiliates. And it alleges that the company has been improperly steering profits to itself through this affiliate company.

Meanwhile, Ocwen has been asking for larger and larger sums of money from the couple. One exhibit in the lawsuit is a recent monthly statement asking for a payment of $73,000.

"It's robbery," Chad Hopkins says. "Every day you think about ... am I going to have to pack up my stuff and lose all this investment?

"When you have small children and stuff, this is the only home they've ever known," he says. " ... [It's] very frustrating. And I know if it's happening to us, I know it's gotta be happening to other people."

Back-Dated Letters

Benjamin Lawsky, the top regulator at the New York State Department of Financial Services, recently released documents about his department's investigation.

Those documents show that regulators are looking into thousands of loan-modification letters that likely caused homeowners "significant harm" because Ocwen back-dated them. Back-dating the letters made it look like the homeowners had missed their chance to try to avoid a foreclosure.

On an investor conference call, Erbey, Ocwen's chairman, pledged to work with regulators. "One of our goals is to keep people in their homes whenever possible," he said. "Ocwen is creating a review and remediation process for borrowers potentially impacted by the letter-dating mistake the company has made."

As far as the homeowner lawsuit, Ocwen offered the following statement: "Ocwen is currently reviewing the lawsuit and will vigorously defend itself against the claims asserted. Because the litigation remains pending, Ocwen declines to comment further at this time."

For young people, turning 21 is generally a reason to celebrate.

If they're insured through the federal health insurance marketplace that operates in about three-dozen states, however, their birthday could mean a whopping 58 percent jump in their health insurance premium in 2015, according to an analysis by researchers at the Center on Budget and Policy Priorities.

Many 21-year-olds who qualify for premium subsidies will be able to sidestep the rate increase if they re-evaluate their coverage options on the federal marketplace before Feb. 15, when the annual open enrollment period ends.

If they don't, they'll generally be automatically renewed into the same plan and with the same premium tax credit they had in 2014.

"If they don't come back to the marketplace, they're going to get a premium tax credit that's based on their age rating as a child, and that premium difference is going to hit them," says Judith Solomon, a vice president for health policy at the budget center.

Families with federal marketplace plans whose now 21-year-old children are covered as dependents will face a premium jump as well.

Under the health law, insurers can no longer base premiums on people's health or pre-existing medical conditions. Instead, insurers are permitted to apply just four premium rating factors in their calculations: age, where someone lives, how many people are going to be covered and whether someone uses tobacco.

The law also prohibits premiums for older adults from being more than three times higher than those for younger adults.

Because of age rating, premiums for most adults will rise slightly every year as they get older. But with children, it's different. Insurers apply the same age-rating factor to all children when computing their premiums. When people turn 21, however, the insurer begins to compute their premiums based on an adult age-rating factor, which results in that 58 percent premium increase.

Young people who go back to the marketplace to shop for a 2015 plan can generally avoid any age-related premium increases. They likely qualify for premium tax credits that are available to people with incomes between 100 and 400 percent of the federal poverty level ($11,670 to $46,680 for an individual). If they return to the marketplace, their premium tax credit will be adjusted to cover the higher age-related premium for their 2015 coverage.

"We've been encouraging everyone to update their profiles on HealthCare.gov so they can ensure that they have a tax credit that reflects what they should be getting," says Jen Mishory, executive director at Young Invincibles, an advocacy group for young people.

Affordable Care Act

Health Insurance

When describing her qualifications for the job, the newly confirmed U.S. ambassador to Hungary cited a "product" she helped develop that is exported to "more than 100 countries, for daily consumption with more than 40 million viewers."

The product Colleen Bradley Bell produced is the soap opera The Bold and The Beautiful.

She was confirmed yesterday by the U.S. Senate, along with Noah Bryson Mamet. In his confirmation hearing, he acknowledged he had never visited Argentina, the country where he will serve as U.S. ambassador.

The big political donor who becomes an ambassador to a relatively small country is something of a Washington punch line and also a tradition. Presidents have done this for decades. But critics say the Obama administration has taken it too far.

According to the Center for Responsive Politics, Bell and Mamet each raised at least $500,000 for President Obama's campaign in 2012.

At Bell's confirmation hearing, Sen. John McCain, R-Ariz., asked her about America's strategic interest in Hungary. The answer that followed could best be described as a word soup.

Listen to the Exchange1:02

Loading…

Listen to the Exchange

"Well, we have a strategic interest," she said. "In terms of what are our key priorities, in Hungary. I think our key priorities are to, um, improve upon as I mentioned the security relationship, and also the law enforcement and to promote business opportunities, increase trade ..."

McCain wasn't impressed. He cleared his throat and asked the question again.

"It's really disgraceful," said McCain following the confirmation vote, which fell neatly along party lines.

Especially, he says, because Hungary is in a perilous state politically, teetering between the influence of Western democracies and Vladimir Putin's Russia. As for Bell's qualifications, White House press secretary Josh Earnest grasped for words at yesterday's press briefing.

"Well she certainly is somebody again, that, that is, has, has had her own distinguished private sector career," said Earnest.

According to the American Foreign Service Association, in Obama's second term a little more than 40 percent of ambassador nominees have been political rather than career diplomats. In recent past administrations the share has been less, 30 percent.

When author Kati Marton was 5 years old, growing up in Hungary, the first American she met was the U.S. ambassador. Her parents, journalists, were deemed enemies of the state and jailed, she says.

"Ambassador [Christian M.] Ravndal made a point of looking after my older sister and me who had been left as, well, political orphans," said Marton, recalling a defining moment in her childhood.

She says he visited them, pulling up in a big Buick with an American flag on the front, a deeply symbolic move in Cold War Hungary.

"The American ambassador in countries that are often forgotten by Washington can play an enormous role, a symbolic role, standing in for what America stands for," said Marton.

Marton is the widow of Ambassador Richard Holbrooke and says she knows rewarding donors is part of the way Washington works.

This year the American Foreign Service Association, which represents career diplomats, came out with four simple qualifications for an ambassador.

"Relevant international experience," explains Bob Silverman, the group's president. "High-level government or other high-level policy articulation experience, good management skills. Good leadership skills."

He opted not to say whether Bell, Mamet and the other recent donor ambassadors met that standard.

Another donor-nominee still awaits confirmation. But George Tsunis faces opposition from a few Senate Democrats, which makes his confirmation to be ambassador to Norway less likely.

Updated at 11:19 a.m.

President Obama named Ashton Carter, a former No. 2 Pentagon official, as his pick to succeed Defense Secretary Chuck Hagel.

Obama described Carter today as one of the "nation's foremost national security leaders."

"He was at the table in the situation room. He was by my side navigating complex security challenges that we were confronting," Obama said. I relied on his expertise and I relied on his judgment."

Carter called the nomination an "honor and a privilege."

He said he accepted the offer because of "the seriousness of the strategic challenges we face, but also the bright opportunities that exist for America if we grab hold of them."

He said, if confirmed, he will give Obama "candid" strategic and military advice. And, in a message to the U.S. military, he said, "I pledge to keep faith with you and to serve our nation with the same unflinching dedication that you demonstrate every day."

Carter's name began to surface this week as a possible replacement for Hagel, who announced Nov. 24 that he would step down once a successor is confirmed. NPR's Eyder Peralta noted that Carter, though unknown to the public, is "regarded as having a great intellect."

He is expected to enjoy bipartisan support during the nominating process.

Sen. Jim Inhofe, R-Okla., said earlier this week that he supports Carter "very strongly."

If confirmed, Carter will be Obama's fourth defense secretary (after Robert Gates, Leon Panetta and Hagel).

A Rhodes scholar, Carter has a doctoral degree in theoretical physics from Oxford University. He would inherit the Pentagon as the U.S. faces many global challenges, including the fight against the Islamic State militant group in Iraq and Syria, a resurgent Russia and unrest in other parts of the world. He also faces newer challenges such as cyberthreats.

Ashton Carter

Chuck Hagel

Obama