Ocwen claims that the company that acted as an independent monitor of its 2015 settlement with California used the servicer’s money to pay for visits to strip clubs and casinos
Owen Financial is suing the company that acted as an independent monitor of its 2015 settlement with the state of California. The embattled servicer – which faces multiple legal battles of its own – claims that Fidelity Information Services defrauded it, even using Ocwen’s money to pay for visits to strip clubs and casinos
As part of a 2015 settlement between Ocwen and the state of California, FIS was retained to conduct a two-year review of Ocwen’s servicing practices at a budgeted cost of $44.8 million. However, Ocwen claimed in a lawsuit filed in the California Superior Court that “(t)hroughout the engagement, FIS made fraudulent or negligent misrepresentations in its monthly invoices to Ocwen about the services FIS claims to have performed and the expenses FIS claims to have incurred.”
Instead, Ocwen claimed that FIS had submitted invoices – totaling “millions of dollars” – that were fraudulent. Ocwen claimed that the financial technology company “dramatically inflated hours,” charging Ocwen for time that FIS employees didn’t actually work, and billed Ocwen for “expenses that either were never incurred or reflected attempts by FIS associates to reimburse themselves for personal or other unallowable expenditures.”
Among the offenses Ocwen claimed FIS committed were:
FIS strongly denied the claims. In a statement to HousingWire, the company claimed that Ocwen filed the lawsuit purely to avoid paying what it owed.
“The complaint filed by Ocwen Loan Servicing against FIS is completely baseless and we plan to defend ourselves vigorously against these false allegations and to pursue collection of the invoices this litigation was filed to avoid.”
However, in a statement emailed to MPA, Ocwen spokesman John Lovallo was adamant that FIS intentionally defrauded the servicer.
“Our complaint speaks for itself, and documents that Fidelity Information Services exploited its position by submitting fraudulent, false and improper invoices to Ocwen relating to FIS’s services and expenses,” Lovallo said. “Ocwen intends to vigorously pursue all remedies stemming from FIS’s fraudulent and abusive billing scheme.”
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As part of a 2015 settlement between Ocwen and the state of California, FIS was retained to conduct a two-year review of Ocwen’s servicing practices at a budgeted cost of $44.8 million. However, Ocwen claimed in a lawsuit filed in the California Superior Court that “(t)hroughout the engagement, FIS made fraudulent or negligent misrepresentations in its monthly invoices to Ocwen about the services FIS claims to have performed and the expenses FIS claims to have incurred.”
Instead, Ocwen claimed that FIS had submitted invoices – totaling “millions of dollars” – that were fraudulent. Ocwen claimed that the financial technology company “dramatically inflated hours,” charging Ocwen for time that FIS employees didn’t actually work, and billed Ocwen for “expenses that either were never incurred or reflected attempts by FIS associates to reimburse themselves for personal or other unallowable expenditures.”
Among the offenses Ocwen claimed FIS committed were:
- Billing Ocwen $2 million for loan-file review – an amount reflecting more than 13,000 billable hours, according to Ocwen – for a month that FIS associates “did not complete a single loan-file review”
- Repeatedly charging Ocwen for “implausible amounts of time”
- Billing Ocwen for every minute FIS employees were onsite, regardless of whether they were actually working – “to the point that associates took breaks as often as 14 times a day, or were observed watching videos instead of doing their jobs”
- Ocwen also claimed that FIS charged it “for amounts (FIS) associates spent patronizing strip clubs and casinos,” and allowed its associates to buy liquor, groceries and gifts for colleagues on Ocwen’s dime.
FIS strongly denied the claims. In a statement to HousingWire, the company claimed that Ocwen filed the lawsuit purely to avoid paying what it owed.
“The complaint filed by Ocwen Loan Servicing against FIS is completely baseless and we plan to defend ourselves vigorously against these false allegations and to pursue collection of the invoices this litigation was filed to avoid.”
However, in a statement emailed to MPA, Ocwen spokesman John Lovallo was adamant that FIS intentionally defrauded the servicer.
“Our complaint speaks for itself, and documents that Fidelity Information Services exploited its position by submitting fraudulent, false and improper invoices to Ocwen relating to FIS’s services and expenses,” Lovallo said. “Ocwen intends to vigorously pursue all remedies stemming from FIS’s fraudulent and abusive billing scheme.”
Related stories:
Ocwen’s business halted by yet another state
Yet another state sues Ocwen
