Mortgage company Ocwen Financial Corp. and spinoff Altisource Portfolio Solutions routinely let bank-owned homes in black and Hispanic neighborhoods fall into disrepair, while those in white areas sparkle, a nonprofit group said Wednesday.
The National Fair Housing Alliance told the U.S. Department of Housing and Urban Development that Ocwen routinely neglects foreclosed homes that it’s paid to manage by Deutsche Bank in 30 metro areas nationwide, including Palm Beach County.
“It’s intentional neglect to maintain homes in communities of color,” said Shanna Smith, president and chief executive of the nonprofit National Fair Housing Alliance.
West Palm Beach-based Ocwen (NYSE: OCN) disputed the latest accusations, which the nonprofit lodged in an administrative complaint filed with HUD.
“We strongly deny the allegations and believe they lack evidence and have no merit,” Ocwen spokesman John Lovallo said Wednesday. “The company will vigorously defend itself against these allegations. Ocwen cares about communities, and is committed to equal maintenance and marketing of bank-owned homes no matter where they are located in the U.S.”
Ocwen has been the subject of consumer complaints and regulatory actions for years, with perhaps the biggest blow coming in April, when 20 states told the company it no longer could take on new business in their states. Shares plunged on that news.
To illustrate what it calls racially unequal practices, the National Fair Housing Alliance pointed to a foreclosed house in a black neighborhood in Boynton Beach. A photo taken in 2016 shows dead grass, lopsided plywood covering a front window and a red flip-flop cast onto the front lawn.
Photos of homes in other Palm Beach County neighborhoods show broken windows, damaged gates, spray-painted interiors and yards strewn with old tires.
By contrast, a foreclosed home in what the National Fair Housing Alliance called a white neighborhood in Royal Palm Beach had a well-maintained lawn and no plywood.
The Fair Housing Center of the Greater Palm Beaches, an affiliate of the National Fair Housing Alliance, said it examined foreclosed properties owned by Deutsche Bank and managed by Ocwen and Altisource from 2014 through 2016.
It found trash and debris at more than 81 percent of foreclosures in black and Hispanic areas, compared to just 25 percent of properties in white areas. The group reported broken or boarded windows in 61.9 percent of homes in black and Hispanic neighborhoods but just 20 percent of white neighborhoods.
Deutsche Bank hires Ocwen Financial and its Luxembourg-based spinoff, Altisource Portfolio Solutions (Nasdaq: ASPS), to manage foreclosed properties, Smith said.
“Hundreds and hundreds of thousands of dollars have been received by Ocwen to do this work,” Smith said.
Ocwen — a name fashioned by spelling “new co” backwards — had 9,700 employees at the end of 2016, most of them in India and the Philippines. The company has about 300 workers at its West Palm Beach headquarters, according to the Business Development Board of Palm Beach County.
Ocwen has weathered regulatory actions in the past, in part by agreeing to cut ties with Bill Erbey, the former Palm Beach resident and longtime chairman of the company. Erbey remains the largest shareholder of Ocwen, with 21 million shares, and Altisource, with 6 million shares.
In late 2013, federal and state regulators hit Ocwen with a $2.1 billion settlement for cheating homeowners. But investors shrugged off the news. Ocwen told the Securities and Exchange Commission its actual cost to settle the regulatory action would be just $67 million.