Ocwen Loses Bid to Overturn Class in Fla. Debt Collection Suit

By Evan Weinberger

A debt-collection lawsuit against Ocwen Financial Corp.'s mortgage servicing unit by Florida homeowners can move forward as class litigation, a federal appeals court decided.

A three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit on June 29 rejected Ocwen Loan Servicing LLC’s request to appeal of a district court order approving two separate classes of consumers, led by Tampa homeowner Timothy Belcher. The consumers allege that the company violated the Fair Debt Collection Practices Act and Florida debt collection laws by improperly contacting borrowers while their mortgages were included in a federal loan modification program.

Ocwen had argued that the decision by the U.S. District Court for the Middle District of Florida to grant class certification was improper and needed to be reviewed. But the Eleventh Circuit said that Ocwen failed to satisfy any of the factors that would support its request to appeal the certification order at this juncture.

In its order, the appeals court said that the district court had adopted a magistrate judge’s recommendation that class certification be granted under the strict administrative feasibility requirement test.

“If Belcher’s class passed muster under that standard, articulating any other, necessarily less demanding one would produce the same result,” the Eleventh Circuit order said.

Eleventh Circuit Judges Robin S. Rosenbaum, Adalberto Jordan and William H. Pryor Jr. signed on to the opinion.

“Ocwen is reviewing the order, and intends to defend itself vigorously,” John Lovallo, a spokesman for the Atlanta-based company, told Bloomberg Law in a July 3 email.

Counsel for Belcher could be reached for comment on July 3.

Loan Modifications

Belcher sued Ocwen in March 2016 alleging that the loan servicer attempted to collect on mortgages that had fallen into delinquency even when his mortgage was covered by a trial period provided under the Home Mortgage Loan Modification Program, or HAMP.

That now-defunct Obama-era program provided incentives to lenders and mortgage servicers to modify mortgages and avoid foreclosures in the wake of the 2008 financial crisis, and barred servicers from initiating collection proceedings against borrowers during the trial modification period.

Belcher had obtained a mortgage in May 2006 from a different lender, and the loan was transferred to Ocwen after the borrower fell behind on payments at some point before March 2015, according to the Eleventh Circuit order.

Ocwen agreed to a HAMP modification soon after.

Belcher moved to certify two separate classes, one for violations of the Florida Consumer Collections Protection Act and the other of the FDCPA, with Judge Steven D. Merryday approving the request on April 2.

Ocwen appealed, but the Eleventh Circuit found that reviewing the class certification order at this stage of the case was inappropriate.

Ocwen is represented by Blank Rome LLP and O’Melveny & Myers LLP. Belcher and the class are represented by Kynes Markman & Felman PA and Saxon Gilmore & Carraway PA.

The case is Ocwen Loan Servicing LLC v. Belcher , 11th Cir., 18-90011, 6/29/18

To contact the reporter on this story: Evan Weinberger in New York at eweinberger@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

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