MaltaToday previous editions

MW 15 June 2016

Issue link: https://maltatoday.uberflip.com/i/692424

Contents of this Issue

Navigation

Page 4 of 23

5 CONTINUES FROM PAGE 1 Ocwen was found having pushed home- owners into foreclosure and prof- iting by funnelling default-related business to William Erbey's as- sociated companies. For example, one subsidiary hosted Ocwen's online auctions; another handled post-foreclosure real estate trans- actions. Mortgage servicers like Ocwen are essentially debt collectors, col- lecting monthly principal and in- terest from homeowners. Prosecutor Benjamin Lawsky accused Ocwen of making deci- sions intended to benefit Erbey's affiliated companies and their share price, "resulting in harm to borrowers, mortgage investors or Ocwen shareholders as a result." In addition to Ocwen Finan- cial – which collected monthly mortgage payments – Erbey was also the chairman and the largest shareholder of four other real es- tate companies that step in when a lender has his property loan fore- closed. Altisource Portfolio Solu- tions ran the auction site Hubzu. com for foreclosed properties to go for a quick sale; Altisource Res- idential Corporation re-purposed a home as a rental property after acquiring it through a foreclosure auction; Altisource Asset Man- agement offered reinsurance; and Home Loan Servicing Solutions was a holding company that pur- chases assets from… Ocwen. In 2014, the New York Depart- ment of Financial Services reached a $150 million settlement with Ocwen, that included the resigna- tion of executive chairman Wil- liam Erbey from Ocwen and its four publicly traded affiliates. Investors who own 25% in Ocwen-serviced trusts have now accused the company of forcing them to pay the cost of the settle- ments, saying Ocwen's practices enriched its corporate affiliates while harming the trusts and their investors. Ocwen has countered that its own independent investigation proves that those accusations hold no water. Also in 2013, some 9,500 home- owners complained about how their mortgages had been serviced. The Consumer Financial Protec- tion Board (CFPB) teamed up with authorities from 49 states to force Ocwen into a $2 billion settlement for in loan reductions to home- owners struggling to stay afloat and $127.3 million in refunds for 185,000 people whose properties had already been foreclosed upon. According to Richard Cordray, head of the CFPB, "Ocwen took advantage of borrowers at every stage of the process." In an interview with The New Republic in 2014, the former pros- ecutor Benjamin Lawsky said: "When a corporation does wrong, it has to be that individuals who work at the corporation have done wrong." mvella@mediatoday.com.mt maltatoday, WEDNESDAY, 15 JUNE 2016 News Ocwen funnelled default-related business to Erbey's companies Gaffarena files court case to force through Old Mint St sale MATTHEW AGIUS PROPERTY speculator Mark Gaffarena, who had benefited from the government's unusual expropriation of his share of a Valletta palazzo, has filed an- other court case attempting to force through the sale of another portion of that same building. In a sworn application filed in May, Gaffarena and his wife Josielle called upon the court to force the owners of another quarter-share of 36, Old Mint Street, Valletta to appear on a contract of sale – which, accord- ing to the October 2014 promise of sale agreement, ought to have happened in April. In both expropriations of Gaf- farena's two 25% shares of the Old Mint Street palazzo which is currently home to a number of government offices, the Gov- ernment Property Division had chosen to expropriate only Gaf- farena's shares and not the 50% share of the building from all co-owners – a decision whose legality is being questioned by many. According to a NAO report on the expropriations, the property had been bought in November 1898 by Raffaele Psaila, who had left equal shares of the property to his four daughters – who later married into the Galea, Mercie- ca, Bonello and Cefai families – and their children. Separately, these four shares, the Galea, Mercieca, Bonello and Cefai shares, were passed down over a number of genera- tions. To date, two of the quarter undivided shares, still belong to the Bonello and Cefai families. The other two quarters, origi- nally belonging to the Galea and Mercieca families, had been purchased by Gaffarena in 2007 and 2015 respectively, and were expropriated by the government in 2015. Gaffarena had obtained the first undivided 25% share from the Galea family on 18 Decem- ber, 2007, which was expropriat- ed by the government on 12 Jan- uary, 2015 for €822,500 in cash and lands. Another 25% share was sold to Gaffarena by the Mercieca family on 26 February, 2015 and expropriated as per the President's Declaration on 8 April, 2015 for another €822,500 in cash and lands – a mere two months after it was purchased. The Prime Minister has filed a court case to recover the money and public lands paid to Gaffa- rena for the irregular expropria- tion. Half of the Bonello share is covered by a promise of sale with Gaffarena, entered into on 31 October, 2014, which expired on 30 April, 2016; the other half remains in possession of the Bonello heirs. It is this (Bonello) share whose sale Gaffarena is now trying to force. The case has been scheduled to be heard by Ms Justice Lorraine Schembri Orland in July. The news comes just six days after a court heard that the own- ers of the remaining 25% of the property in Old Mint Street say that they had never been noti- fied of plans to expropriate the property and only found out by chance. David Cefai, whose family owns the remaining quarter un- divided share of the property had made the extraordinary claim whilst testifying in a case filed by the Prime Minister against the Gaffarenas. That case was filed in January with the stated aim of recouping the lands transferred to the Gaffa- rena couple as part of the deal for the Old Mint Street palazzo's expropriation. That fourth and final share of the property, belonging to the Cefai family, was also under a promise of sale signed with Gaffarena on 26 March, 2015, the one-year term of which had lapsed on 26 March, 2016. 'Citizen Bill': William Erbey was forced to resign the chairmanship of mortgage giant Ocwen for using the company to funnel business to his companies

Articles in this issue

Archives of this issue

view archives of MaltaToday previous editions - MW 15 June 2016