Ocwen faces federal lawsuit alleging neglect of foreclosures in black, Hispanic areas


In a federal lawsuit filed Thursday, fair housing activists accuse Deutsche Bank, Ocwen Financial Corp. and Altisource Portfolio Solutions of purposely neglecting foreclosed homes in black and Hispanic neighborhoods.

“The poor maintenance of homes in communities of color resulted in these homes having wildly overgrown grass and weeds, unlocked doors and windows, broken doors and windows, dead animals decaying and trash and debris left in yards,” the National Fair Housing Alliance said in a statement.

Related: Advocacy group says Ocwen neglected foreclosed homes

The National Fair Housing Alliance is joined in its suit by 19 housing organizations across the country, including the Fair Housing Center of the Greater Palm Beaches in Lantana.

The suit is just the latest allegation of unsavory practices by West Palm Beach-based Ocwen (NYSE: OCN), a company that collects mortgage payments on behalf of lenders, and spinoff Altisource Portfolio Solutions (Nasdaq: ASPS). The new federal suit mirrors allegations housing activists made last year in a formal complaint to the U.S. Department of Housing and Urban Development. 

To illustrate what it calls racially unequal practices, the National Fair Housing Alliance’s HUD complaint pointed to a foreclosed house in a black neighborhood in Boynton Beach. A photo taken in 2016 featured 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.

Even after housing activists complained to HUD, Deutsche Bank, Ocwen and Altisource didn’t improve maintenance of properties in black and Hispanic areas, said Vince Larkins, president and chief executive of the Fair Housing Center of the Greater Palm Beaches.

“Basically, the response we got was that they did not want to do anything to repair the damage in the communities, which is unfortunate,” Larkins said.

In a statement Thursday, Ocwen disputed the allegations in the suit.

“We strongly deny the National Fair Housing Alliance’s allegations, and believe they lack credible evidence and have no merit,” Ocwen said. “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.”

The National Fair Housing Alliance says photos of Deutsche Bank foreclosures reveal “a stark pattern of discriminatory conduct.” 

The group said the lawsuit is the result of an investigation it started in 2010.

Larkins said neglecting homes creates a ripple effect, dragging down values of surrounding properties.

“We’re talking about basically robbing communities of color,” Larkins said. “Whole communities are stripped of wealth by these actions.”

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.


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