Mortgage Foreclosure & Refinance Resource

As the property manager for thousands of foreclosed homes owned by the U.S. Department of Veterans Affairs, Ocwen Financial Corp. has neglected maintenance, been proven slow to sell houses and charged taxpayers for repairs that weren’t made, a report by the federal Government Accountability Office says. The company, which also handles mortgage payments and foreclosures for commercial lenders, has been criticized for heavy-handed tactics.

The VA is only the latest organization to complain about Ocwen. Ocwen also handles mortgages for banks and other lenders and over the years has faced a number of lawsuits from borrowers. The National Consumer Reinvestment Coalition has criticized its practices.

“VA inspections of foreclosed properties managed by Ocwen have identified a substantial number of deficiencies, such as failure to secure doors and windows, remove trash and debris, maintain lawns and make needed repairs,” the report says. Ocwen’s sluggish pace of home sales has annoyed the VA.

The GAO report said Ocwen needed an average of 342 days to sell a home in 2007, up from 311 days in 2005 and only 237 days in 2000, when government employees handled foreclosure sales.

And nearly a quarter of VA’s foreclosed properties had been languishing on the market for more than a year.

Unhappy with the sale prices Ocwen was getting for its properties, the Veterans Administration imposed $1.3 million in penalties on Ocwen in the first nine months of 2005, the report says.