Case3:14-cv-02970-EMC Document1 Filed06/26/14 Page1 of 55
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MORRIS POLICH & PURDY LLP
David J. Vendler, Esq. (SBN 146528)
Email: [email protected]
1055 West Seventh Street, Suite 2400
Los Angeles, California 90017
Tel.: (213) 417-5100
Fax: (213) 488-1178
MICHAEL R. BROWN, APC
Michael R. Brown, Esq. (SBN 65324)
Email: [email protected]
18101 Von Karman Avenue, Suite 1900
Irvine, California 92612
Tel.: (949) 435-3888
Fax: (949) 435 3801
Attorneys for Plaintiffs, GEORGE and CLAUDIA
CAMBERIS, and all others similarly situated
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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GEORGE CAMBERIS and CLAUDIA
CAMBERIS, individually, and on behalf
of the class of all others similarly
situated,
Plaintiff,
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vs.
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OCWEN FINANCIAL
CORPORATION,
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Defendant.
Case No.:
CLASS ACTION COMPLAINT
FOR:
1. BREACH OF CONTRACT
2. BREACH OF THE COVENANT
OF GOOD FAITH AND FAIR
DEALING
3. VIOLATION OF UNFAIR
COMPETITION LAW
4. DECLARATORY RELIEF
5. INJUNCTIVE RELIEF
6. FRAUD
7. NEGLIGENCE
8. NEGLIGENT
MISREPRESENTATION
9. VIOLATION OF 26 U.S.C.
§ 6050H
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DEMAND FOR JURY TRIAL
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COME NOW plaintiffs, George L. Camberis and Claudia Camberis
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(“Plaintiffs”), who, on behalf of themselves and all others similarly situated
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(collectively “Class Members”), complain as follows against Defendant Ocwen
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Financial Corporation (“OCWEN” or “Defendant”).
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I.
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SUMMARY OF THE ACTION
1.
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For almost all owners of real property, the mortgage interest deduction is
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their largest single tax deduction and can amount to hundreds, thousands, or even tens
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of thousands of dollars per year in tax savings. The Internal Revenue Service (“IRS”),
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tax-payer-borrowers, and accounting professionals all rely on Forms 1098 to
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determine the amount of mortgage interest tax-payer-borrowers have paid during a
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given year so as to know how much can be deducted from their gross income pursuant
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to 26 U.S.C. Section 163(a). The statute that mandates the issuance of Forms 1098 is
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26 U.S.C. § 6050H. It states very simply that:
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Any person1—
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(1) who is engaged in a trade or business, and
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(2) who, in the course of such trade or business, receives from any individual
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interest aggregating $600 or more for any calendar year on any mortgage, must
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report on Forms 1098 the amount of mortgage interest they “receive” if the
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amount is over $600.
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2.
This case arises from OCWEN’s systematic failure to report tens or
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hundreds of millions of dollars in mortgage interest that it has actually received from
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consumers holding negative amortization “Option Arm” loans – and potentially other
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Notably, the statutory language is not limited to lenders, but uses the much broader
term “person.” In short, it is simply the receipt of the interest that triggers the reporting
obligation. Thus, mortgage servicers who do not actually own the notes are still the
party responsible for issuing Forms 1098.
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types of loans where interest was deferred by borrowers past the date it was originally
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due.2
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An example best explains what OCWEN is doing wrong. Assume that
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like the Plaintiffs, John and Sally Doe have an “Option ARM” loan in the amount of
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$200,000 and that the interest obligation on that loan is $1,000 per month. Assume
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further that the “minimum payment” the Does are allowed to make under their note is
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$750 per month, i.e. $250 less than the interest actually due for that month under the
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note. In tax year 2013, the Does elect to pay the “minimum payment” every month,
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resulting in the Doe’s “deferring” $3,000 of interest that year. This $3,000 is then
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added to the Doe’s loan balance, resulting in “negative amortization.” Finally, assume
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that on the last day of 2013, the Doe’s sell their house and repay their loan, including
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all of the previously deferred interest.
4.
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Plaintiffs’ position is that the Does’ election to defer their payment of
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interest to a later time than originally due does not change its fundamental character; it
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is still deductible mortgage interest reportable by the receiving lender on Form 1098
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pursuant 26 U.S.C. § 6050H when paid. Thus, in the above scenario, the Plaintiffs
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contend the Does should receive a Form 1098 that includes the $3,000 in deferred
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interest along with the $9,000 in regular monthly interest payments made by them
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($750 X 12 months) in the course of that year. But OCWEN is not reporting the
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deferred interest at all on the Form 1098s it is issuing. Plaintiffs have been told that
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OCWEN’s position is that the deferred interest is “added to the principal balance of
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An “Option Arm” loan provides borrowers with four (4) different payment “options”
in any given month. The first “option” is to make a full payment of the principal and
interest due under the note. The second “option” is to pay “Interest Only.” The third
“option” is to pay the “Minimum Payment,” which may be, and often is, less than the
interest then due on the note. The fourth “option” is to make accelerated payments on
a 15-year amortization schedule. The marketing objective of the “Option ARM loan”
was to allow consumers to minimize their monthly payment so that they could
“afford” to purchase a home based upon their available cash flow. Thus, consumers
with these loans overwhelmingly chose the “Minimum Payment” option.
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your loan” and from OCWEN’s perspective, becomes principal. Therefore, OCWEN
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no longer considers the repayment of previously deferred interest as an interest
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payment reportable on Form 1098. This is not only contrary to established tax law,
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but is also contrary to the practice of OCWEN’s immediate predecessor to Plaintiffs’
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loan, Homeward Residential, Inc. (“Homeward”). Homeward did report Plaintiffs’
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payments of deferred interest on the Forms 1098 it issued to Plaintiffs prior to
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OCWEN’s assuming the servicing rights to Plaintiffs’ loan.
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When OCWEN took over the servicing rights of Plaintiffs’ loan,
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OCWEN intentionally, for its own business benefit and with no notice to Plaintiffs
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unilaterally changed the method which had historically been used to calculate
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Plaintiffs’ mortgage interest. Notwithstanding the longstanding (and proper) reporting
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practice that the Plaintiffs (and the IRS) had the right to rely on, OCWEN arbitrarily
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deceived everyone with this secret reporting change.
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concealment of its improper and illegal reporting practice has not only caused tens of
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thousands of tax-payers to unknowingly file erroneous tax returns -- which will have
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to be unwound at substantial cost -- but may have also caused some Class Members
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the damage of permanently losing valuable tax deductions by virtue of the passage of
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the 3-year statute of limitations for amending tax returns imposed by 26 U.S.C. §
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6511.
OCWEN’s intentional
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II.
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HOW NEGATIVE AMORTIZATION LOANS WORK
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6.
OCWEN is one of the nation’s leading mortgage servicing companies.
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As part of its business, OCWEN has owned, serviced and/or acquired the servicing
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rights to thousands of loans, both in California and nationally. As a regular part of its
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business of servicing loans, it “receives” mortgage interest from mortgagors like
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Plaintiffs and the other Class Members.
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7.
It is alleged on information and belief that in the case of Plaintiffs,
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OCWEN either acquired Plaintiffs’ loan or acquired the right to service Plaintiffs’
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from Homeward by written contract in a transaction that likely involved hundreds or
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thousands of other mortgages on which deferred interest was/is owed. It is further
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alleged on information and belief that at some time after Plaintiffs entered into their
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loan, but prior to OCWEN’s taking over the servicing rights to their loan, their loan
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was sold by its initial issuer, American Brokers Conduit, and then at some point in
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time may have been packaged into an investment vehicle known as Residential
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Mortgage-Backed Securities (“RMBS”).
In these investment vehicles, a special
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purpose entity is set up to own the packaged mortgages. Shares of that entity (or a
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grouping of similar entities) are then sold to investors.
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generally unaware of the names of the entities that actually own their notes. Servicers
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like OCWEN act as mortgage-payment collectors for the investors who, through their
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shares in the RMBS, hold slices of the complex packaged residential debt. Thus,
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Plaintiffs allege that in doing the things alleged herein, OCWEN may have been acting
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as the agent for the entity or entities holding the notes of the Plaintiffs and the Class
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Members.
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The borrowers are thus
Plaintiffs are unaware of exactly what entity actually currently owns
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Plaintiffs’ mortgage, and may seek to amend this complaint when that information is
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learned.
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amortization loans. But, irrespective of what entity may actually own Plaintiffs’ note,
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or the notes of Class Members, OCWEN is nonetheless the “person” that, in the
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regular course of its business, received mortgage interest payments from Plaintiffs and
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the Class Members during the tax-years here in question and is thus the “person” with
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the duty under 26 U.S.C. Section 6050H to provide Forms 1098 to plaintiffs and the
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Class Members.
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9.
Many of the loans that were packaged into RMBS were negative
Because negative amortization loans like Plaintiffs’ were primarily
marketed to consumers who wanted to minimize their monthly payment so they could
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“afford” a home that would otherwise be too expensive for them based upon their
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available cash flow, borrowers with negative amortization loans, including Plaintiffs,
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overwhelmingly chose the “Minimum Payment” option when selecting which
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“option” to pay in any given month. This way, they could lower their monthly
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payment to an amount they could manage by “deferring” (for months or even years)
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some of the interest that would otherwise have been due in the month of their
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payment. Others chose the “Minimum Payment” as a tax planning device. But the
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borrower’s intentions in doing so are irrelevant to this case. The interest that was
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“deferred” by them, and which would then be added to the loan balance to be paid
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back later, (with additional interest at the same rate as the principal, i.e. “capitalized”),
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continued to be interest.
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10.
Choosing the “Minimum Payment” option would usually, but not always,
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result in negative amortization, meaning that as interest was deferred, the overall loan
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balance would increase rather than decrease. (However, in or about 2009, interest
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rates and the mortgage indexes plummeted and this caused a situation where the
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interest rate on some consumers’ loans may have “adjusted” to a rate where the
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monthly interest obligation fell below the level of the “Minimum Payment.” If this
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happened, the positive difference between the “Minimum Payment” and the monthly
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interest due should have been allocated first to paying back any previously deferred
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interest, and then to principal. (This is consistent with both tax law and the terms of
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Plaintiffs original note).
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11.
Generally, a limit of 115% of the original principal amount was placed on
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the amount of negative amortization consumers were allowed to incur. It is not known
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exactly in which tax-year OCWEN first began servicing negative amortization loans,
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or in what year OCWEN began to falsely report on Forms 1098 the amount of interest
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payments it “received” from its borrowers. However, negative amortization loans
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began to flood the consumer market in or about 2004.
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III.
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PLAINTIFFS’ INDIVIDUAL FACTUAL ALLEGATIONS
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A.
Plaintiffs’ Negative Amortization Note
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Plaintiffs own a single family home located at 103 Heritage Park Drive
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Danville, Contra Costa County, California. On or about October 27, 2006, Plaintiffs
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obtained a negative amortization loan in the amount of $494,500 from American
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Brokers Conduit. A true and correct copy of their note is attached hereto as Exhibit
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“A.” OCWEN took over the servicing of Plaintiffs’ loan in or about February 4, 2013.
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13.
Plaintiffs’ original note provided Plaintiffs with a “Minimum Payment”
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option similar to that previously described.
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“Minimum Payment” option which resulted in negative amortization during the loan’s
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pendency such that as of December 2009, their loan balance had grown to its
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highwater mark of $538,906.58. In short, by December 2009, Plaintiffs had accrued
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$44,406.58 in unpaid/deferred interest.
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Plaintiffs took advantage of the
The entirety of this sum was charged to Plaintiffs for their use of the
original principal amount. As such, it is entirely interest.
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Between December 2009 and February 4, 2013, when OCWEN took over
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the servicing of Plaintiffs’ loan, plaintiffs had paid back $13,879.81 of the deferred
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interest which had accrued. In 2013, for instance, prior to OCWEN’s taking over the
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servicing rights to Plaintiffs’ loan, Plaintiffs made two mortgage payments (January
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and February) to Homeward.
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Based on the interest it received from Plaintiffs in 2013, Homeward
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issued Plaintiffs a Form 1098 for that tax year. Attached hereto as Exhibit “B” is a
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true and correct copy of the 2013 Form 1098 which Homeward sent to Plaintiffs.
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Notably, in compliance with 21 U.S.C. Section 6050H, the deferred interest that
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Plaintiffs paid back during these two months was properly reported on Plaintiffs’ 2013
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Form 1098 issued by Homeward.
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17.
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At the time OCWEN took over the servicing of Plaintiffs’ loan, their loan
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balance was $525,026.77, of which $30,526.77 was previously deferred interest that
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had been added to their original principal balance of $494,500.
18.
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Plaintiffs made all of their payments due to OCWEN in 2013 until
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November 2013. In December 2013, Plaintiffs sold their home and paid off the entire
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then-existing balance of the existing loan, including all of the previously deferred
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interest.
19.
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In or about February, 2014, OCWEN issued to plaintiffs a Form 1098
supposedly representing the amount of mortgage interest Plaintiffs had paid to it in
2013. A true and correct copy of this Form 1098 is attached hereto as Exhibit “C.”
20.
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The Form 1098 Plaintiffs received from OCWEN for 2013 reflected
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$14,753.50 in mortgage interest paid. This is not the correct amount of interest
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OCWEN actually received from Plaintiffs in tax year 2013.
21.
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OCWEN’s method for calculating mortgage interest is not only
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inconsistent with the method that had historically been used by Homeward, but is also
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simply wrong under established tax law. OCWEN treated Plaintiffs’ loan as though
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the entire loan balance that it took over in February, 2013 was comprised of principal
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only.
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interest payments that the interest that was previously deferred did not simply
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disappear when OCWEN took over the servicing of Plaintiffs’ loan. Indeed, interest
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does not lose its character as deductible mortgage interest simply because it is paid
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back in a later year, or to a different mortgage servicer. Because Plaintiffs still owed
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previously deferred interest on their note as of the date that OCWEN took over their
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loan, OCWEN should have credited all of Plaintiffs’ payments toward retiring
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Plaintiffs’ deferred interest balance before crediting any payments to repayment of
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principal. (Indeed, Plaintiffs’ note dictates that payments shall first be allocated to
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interest and only then to principal). This is consistent with tax law for which there is,
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and was in 2013, ample authority instructive to OCWEN on this point. Had OCWEN
OCWEN thus failed to recognize in calculating Plaintiffs’ 2013 mortgage
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calculated Plaintiffs’ interest payments correctly, Plaintiffs’ 2013 Form 1098 would
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have reported roughly $45,280 in interest paid instead of the $14,753.50 that was
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reported on the 2013 Form 1098 issued by OCWEN. In short, OCWEN should have
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reported as interest paid not only the $14,753.50 in monthly interest that Plaintiffs
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were as charged, and paid, for their use of the funds during the period from February
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2013, when OCWEN took over their loan until they paid off the loan, but also the
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30,526.77 in deferred interest that existed at the time OCWEN took over Plaintiffs’
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loan and which was paid when the entire principal and outstanding interest was paid at
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the time of the closure of the loan.
22.
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The method for properly calculating interest paid by a borrower when a
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portion of interest has been deferred and then repaid is known to lenders and was
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known to OCWEN. As previously alleged, Plaintiffs’ previous lender, Homeward,
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properly reported paid deferred interest as interest on the 2013 Form 1098 it issued to
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Plaintiffs.
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(correctly) reports payments of previously deferred mortgage interest on the Forms
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1098s it issues to its borrowers. Attached as Exhibit “D” is a true and correct copy of
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a redacted Form 1098 issued to a Wells Fargo borrower that specifically (and
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correctly) denotes the customer’s payment of previously deferred interest and includes
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that amount as mortgage interest paid. It is further alleged that Bank of America,
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N.A., had previously incorrectly reported paid deferred interest similar to OCWEN,
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but now reports payments of deferred interest by Option ARM loan holders correctly
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and in compliance with 26 U.S.C. § 6050H.
Wells Fargo Bank, N.A., another leading national mortgage lender
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B.
Borrowers, Tax Professionals And The IRS All Rely Upon The Mortgage
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Interest Stated In Form 1098s.
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23.
Mortgage amortization tables are complicated and difficult for most
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people to understand. While a mortgage payment may be constant, the portion of that
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payment that represents interest is constantly changing month by month as the
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mortgage balance changes. Thus, reliance on Forms 1098 by consumers and their tax-
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preparers (without cross-checking against what portion of each of their 12 mortgage
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payments actually constitute interest) is the norm among consumers and their tax
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preparers. This is reasonable since: (1) mortgage lenders/servicers like OCWEN have
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the legal duty under 26 U.S.C. § 6050H to calculate and report those amounts
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accurately; (2) the IRS relies exclusively on the amounts contained in the 1098 forms
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it receives; and (3) the IRS maintains a policy whereby it will reject any attempt by
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tax-payers to claim different amounts of interest from those appearing on the tax-
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payer’s Form 1098.
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24.
Examples of the IRS’s policy are evidenced by Exhibits “E” and “F”
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hereto, which are redacted IRS letters sent to tax-payers other than Plaintiffs who, like
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Plaintiffs, had negative amortization mortgages and who tried to independently
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calculate and submit to the IRS the correct amount of deferred interest that they had
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paid. The IRS rejected those tax-payers’ returns stating, for instance, in Exhibit “E”
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that “we [the IRS] cannot adjust the amount claimed on schedule A for mortgage
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interest, without a corrected Form 1098…” It is further alleged that the IRS Office of
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the Taxpayer Advocate has taken the position that the resolution of Form 1098
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reporting disputes between an issuer and the recipient is a “legal matter” that the IRS
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would not interfere with. Attached hereto as Exhibit “G” is a true and correct email
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exchange between counsel for plaintiffs and the IRS (relating to Bank of America,
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N.A. also pursuing the same type of wrongful interest reporting policy). It is further
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alleged that although the Department of Justice received notice under CAFA of the
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eventual settlement wherein Bank of America, N.A. changed its reporting policy, the
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IRS chose not to involve itself in that litigation.
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25.
Plaintiffs only noticed the discrepancy in OCWEN’s interest reporting in
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late 2013. Plaintiffs complained to OCWEN in or about early 2014 telling it that it
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had not properly calculated their mortgage interest for tax year 2013. Plaintiffs were
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told over the phone that OCWEN was rejecting Plaintiffs’ complaint and would not be
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changing its Form 1098 reporting policy or issuing them a corrected Form 1098.
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26.
Plaintiffs allege on information and belief that the reason OCWEN is
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wrongfully reporting Plaintiffs’ interest payments and those of other class members is
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for its own financial benefit. It is alleged that OCWEN knowingly started to purchase
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the servicing rights to Option Arm Mortgages that had a separately reportable income
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component to the seller (i.e. the unpaid deferred interest) which would be reportable
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by the seller as income, with the intent to convert it into an asset note only such that
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there was no separately reportable income component. In other words, prior owners
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of the mortgages, including Homeward, had to report as income interest they received
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from borrowers. Yet OCWEN, upon acquiring ownership or servicing rights to these
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mortgages that had a reportable income component, chose not to call payments for
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deferred interest “income” to OCWEN, thereby reducing a significant tax liability,
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while at the same time depriving Plaintiffs and class members / borrowers of a
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significant tax benefit.
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27.
Through its purchase OCWEN effectively transformed interest to
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principal without notice to borrowers and in direct violation of IRS regulations, and
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for its own pecuniary benefit – or the benefit of the other party to the servicing
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contract – and to the direct harm and detriment of the borrowers.
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28.
Because OCWEN only took over Plaintiff’ loan in 2013, Plaintiffs are
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currently unaware of how long (how many tax-years) OCWEN has been misreporting
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mortgage interest. Plaintiffs are also unaware of how many individual Forms 1098
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issued by OCWEN have been issued using this incorrect method of calculation.
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Plaintiffs, however, allege on information and belief that the number of class members
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in the same situation as Plaintiffs is well over 10,000 and may be more than 100,000.
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29.
Plaintiffs further allege that some persons whose loans are being serviced
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by OCWEN may have gone through loan modifications where previously deferred
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interest was consolidated with principal into a “new principal balance” and that
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payments by consumers on the “new principal balance” were, for Form 1098
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purposes, treated by OCWEN as though the “new principal balance” did not include
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interest that was unpaid prior to the loan modification. Persons in this situation would
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also be class members here as the identical wrong – failure to properly account for
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payments of previously deferred interest on Forms 1098 – was practiced against them.
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In short, it is not just Option Arm loan holders that are class members, but all persons
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who paid more than $600 in mortgage interest to OCWEN that was not reported on
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the FORM 1098 issued to them by OCWEN.
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C.
Plaintiffs Has Been Harmed By OCWEN’s Wrongful Conduct
30.
Plaintiffs have been damaged by OCWEN’s wrongful Form 1098
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reporting in several ways. First, as shown above, the amount of interest that Plaintiffs
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actually paid in 2013 is far greater than the amount of interest that was reported by
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OCWEN. As a result, Plaintiffs have not been able to correctly state their taxes or
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obtain the value of the full mortgage interest deduction they are entitled to under 26
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U.S.C. Section 163(a).
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31.
And, since OCWEN refused to provide a correct Form 1098 to Plaintiffs
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for tax-years 2013 when requested to do so, they have no other recourse -- other than
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through this action -- to force OCWEN to issue them a corrected Forms 1098 for that
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tax-year that reflects the actual amount of mortgage interest paid by Plaintiffs. The
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same is true for all Class Members for all years in which OCWEN utilized its
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wrongful reporting policy.
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32.
Plaintiffs and Class Members have suffered damages consisting of, at
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least the following for each tax year in which OCWEN improperly reported the
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amount of interest paid: (1) the accountancy fees that will be necessary to prepare and
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file amended tax returns (where such returns can still be filed) after OCWEN issues
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corrected Form 1098s accurately accounting for the amount of mortgage interest paid
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during those years, (2) for all years in which the statute of limitations for amending tax
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returns has expired, the differential between the value of the Class Members’
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mortgage interest deductions (both state and federal) when taken and used on their tax
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return and what the value of the deduction would have been if the correct amount of
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mortgage interest had been reported timely by OCWEN (plus interest on those
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amounts); (3) for all years in which the statute of limitations for amending tax returns
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has expired, the accountancy fees necessary to determine the difference in value of the
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deduction when taken and used on their tax return and what the value of the deduction
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should have been if OCWEN had reported the correct amount timely. (All of this
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relief can properly be awarded on equitable grounds as well.)
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33.
Plaintiffs and class members will continue to be damaged in the future
unless OCWEN is ordered to correct its reporting policy on a prospective basis.
34.
Thus, Plaintiffs, on behalf of themselves and the Class Members, seek
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injunctive and equitable relief and damages as alleged above from OCWEN for
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intentionally, willfully and deceitfully (or giving OCWEN the benefit of the doubt and
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calling the actions negligently done) under-reporting to them and to the IRS the true
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and correct amount of “mortgage interest” payments they have made and are entitled
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to deduct on their tax returns. They also seek declaratory relief asking the Court to
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declare that OCWEN’s accounting and reporting practices are wrongful and that
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OCWEN be required to issue corrected Form 1098s to Plaintiffs, Class Members and
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the IRS for all tax years where OCWEN wrongfully reported mortgage interest
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payments.
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IV.
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THE PARTIES
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35.
Plaintiffs are individuals who, during all times relevant herein, resided in
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Danville, Contra Costa County, California. Plaintiffs had a mortgage loan owned
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and/or serviced by OCWEN. Plaintiffs paid OCWEN more than $600 in mortgage
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interest in tax-years 2013, but did not receive an IRS Form 1098 from OCWEN for
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that tax-year correctly reporting all of the interest they paid because of OCWEN’s
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wrongful accounting practice previously described.
36.
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Class Members reside in and are located throughout the United States and
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in foreign jurisdictions. Each Class Member either owns a main home, second home,
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residential rental home, or combinations thereof in the United States, or in one of its
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possessions or territories, with an OCWEN-owned or serviced loan and paid
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previously deferred interest to OCWEN which OCWEN failed to include in the Class
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Member’s Form 1098 for the year when the payment was made.
37.
9
OCWEN is, and at all times mentioned herein was, a Florida corporation
10
and maintains its principal place of business at 2002 Summit Boulevard, 6th Floor,
11
Atlanta, Georgia.
12
13
V.
14
JURISDICTION AND VENUE
38.
15
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331,3
16
2201, 2202. Subject matter jurisdiction also exists under the Class Action Fairness
17
Act of 2005 -- 28 U.S.C. §§ 1332(a) and 1332(d) -- because the matter in controversy
18
exceeds $5.0 million exclusive of interest and costs and the Named Plaintiffs are
19
citizens of California and OCWEN is not.
20
information and belief, in every state in America. There is therefore minimal diversity
21
between the Class Members and the Defendant. Further, more than two-thirds of the
22
members of the putative Class Members are citizens of states different from that of the
23
Defendant and this case does not present a local controversy.
24
3
25
26
27
28
Further, Class Members reside, on
Plaintiffs assert federal question jurisdiction exists based on their contention that
there is at least a good faith argument that supports the finding that an implied private
right of action exists under 26 U.S.C. Section 6050H as that Section was enacted as
part of the Taxpayer’s Bill of Rights II. See, e.g. Doane v. Metal Bluing Products,
Inc., 568 F.Supp. 744, 745-746 (D.C.N.Y. 1983) (where a good faith argument can be
made that a federal statute provides for an implied right of action, then federal
question jurisdiction exists).
-14CLASS ACTION COMPLAINT
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1
39.
This Court has personal jurisdiction over OCWEN because, among other
2
things, OCWEN does business in the State of California and in this Judicial District,
3
and because OCWEN has established minimum contacts with California such that the
4
exercise of jurisdiction over it will not offend traditional notions of fair play and
5
substantial justice. Indeed, OCWEN has voluntarily conducted business and solicited
6
customers in the State of California for its loans, including in this judicial district and
7
continues to commit the wrongful acts alleged herein against California residents
8
within this judicial district.
9
40.
Venue is proper in this judicial district under 18 U.S.C. §1391 and 1965.
10
OCWEN can be found in, has one or more agents in, and/or transacts or has transacted
11
business in this judicial district.
12
13
VI.
14
CLASS ALLEGATIONS
15
41.
Paragraphs 1 through 40 above are incorporated herein by reference.
16
42.
Plaintiffs bring this action on their own behalf and on behalf of the
17
classes of persons similarly situated to them pursuant to Rule 23(a) and 23(b)(2) and
18
(b)(3) of the Federal Rules of Civil Procedure.
19
43.
Plaintiffs seeks to represent a damage class of:
20
All persons who made payments of mortgage interest over $600 to
21
OCWEN on loans secured by real property in the United States (or in
22
its territories and protectorates) during any calendar year and where
23
OCWEN (and/or the party holding the note) did not report to the
24
person on Form 1098 the full amount of the mortgage interest that it
25
received from the person during the calendar year for which the Form
26
1098 was issued.
27
Plaintiffs also seek to represent an injunctive class consisting of:
28
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1
All persons who made payments of mortgage interest over $600 to
2
OCWEN on loans secured by real property in the United States (or in
3
its territories and protectorates) during any calendar year and where
4
OCWEN (and/or the party holding the note) did not report to the
5
person on Form 1098 the full amount of the mortgage interest that it
6
received from the person during the calendar year for which the Form
7
1098 was issued.
8
Plaintiffs reserve the right to amend the definition of these classes, or to amend their
9
complaint to state appropriate sub-classes following discovery.
10
44.
Plaintiffs do not know the exact size of the classes or the identities of the
11
Class Members since such information is in the exclusive control of OCWEN. They
12
believe, however, that the classes encompass as many as tens of thousands of
13
individuals who are geographically dispersed throughout the United States and in
14
foreign nations. The number of members in the classes are certainly so numerous that
15
joinder of all Class Members is impracticable.
16
45.
There are numerous questions of law and fact common to the classes that
17
will predominate over any questions affecting only individuals.
18
common questions are:
19
a.
Among these
Whether “deferred interest” paid by Class Members to OCWEN is
20
“mortgage interest” that should have been reported in the year in
21
which it was paid;
22
b.
Whether OCWEN had the right to unilaterally, and without notice
23
to its borrowers, (or to the IRS) fail to report mortgage interest in
24
the year in which it is paid;
25
c.
Whether OCWEN had the right to unilaterally, and without notice
26
to its borrowers, change the method of mortgage interest reporting
27
that had historically been used without notice to the borrower;
28
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d.
1
Whether OCWEN maintains written and/or unwritten policies,
2
procedures and/or practices concerning the accounting and
3
reporting of mortgage interest payments received by OCWEN from
4
Class Members, and whether those policies have changed over
5
time;
e.
6
against the Class Members;
7
f.
8
Whether OCWEN’s disclosures to consumers were adequate as to
how it would treat payments of deferred mortgage interest;
9
g.
10
What injunctive relief would be appropriate to prevent further
wrongful conduct by OCWEN;
11
h.
12
What remedial measures would be appropriate to remedy the
wrongs that have been done by OCWEN to the Class; and
13
i.
14
15
Whether OCWEN acted intentionally in committing its wrongs
46.
Whether punitive damages should be awarded against OCWEN.
The claims of the Plaintiffs are typical of the claims of the classes and do
16
not conflict with the interests of any other Class Members in that both the Plaintiffs
17
and the other Class Members were subjected to the same wrongful policies, practices
18
and procedures of OCWEN and all have an interest (and legal duty) to assure that their
19
taxes are properly stated.
20
47.
The Plaintiffs will fairly and adequately represent the interests of the
21
other Class Members. The Plaintiffs has retained skilled and experienced counsel to
22
represent the classes in this class action litigation.
23
48.
Prosecution of separate actions will create the risk of adjudications with
24
respect to individual Class Members which would, as a practical matter, be dispositive
25
of the interests of Class Members who are not parties to those adjudications and
26
would/could substantially impair or impede their ability to protect their interests.
27
28
49.
In adopting and implementing the policies, practices and procedures
alleged, OCWEN has acted, failed, or refused to act on grounds generally applicable
-17CLASS ACTION COMPLAINT
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1
to the class, thereby making appropriate final injunctive relief or declaratory relief
2
with respect to the class as a whole.
3
50.
The class action is superior to other available methods for fairly and
4
efficiently adjudicating the issues concerning whether OCWEN’s policies, practices
5
and procedures in accounting for and reporting the payment of “deferred mortgage
6
interest” received by OCWEN have class-wide impact and effect are in violation of
7
IRS requirements.
8
9
COUNT I
10
BREACH OF CONTRACT
11
51.
Plaintiffs re-allege and hereby incorporate each and every allegation
12
contained in Paragraphs 1 through 50 of this Complaint as though fully set forth
13
herein.
14
15
16
52.
With the origination of each of the loans OCWEN services, the original
lender provided Plaintiffs and Class Members with promissory notes.
53.
Although these notes do not contain any provision specifically governing
17
the manner in which the lender would report mortgage interest to Plaintiffs and Class
18
Members, doing so is nonetheless a term of each such contract because the lender had
19
a legal duty to provide accurate Forms 1098 as required by 26 U.S.C. § 6050H. This
20
contractual term is also material to borrowers because of the tax deductibility of
21
mortgage interest and so they can carry out their legal obligation to file their taxes
22
accurately.
23
54.
When plaintiff’s loan was sold by the original issuer, the acquiring entity
24
succeeded to all of the rights and obligations imposed by the original loan contract.
25
When OCWEN acquired the servicing rights to plaintiffs’ loan from whichever entity
26
in fact owns plaintiff’s mortgage, it assumed the role of acting as the agent of the
27
owner of the note and thus was bound by the note’s terms. Alternatively, Plaintiff and
28
the Class Members were intended third party beneficiaries of the contract between the
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1
owner of Plaintiff’s mortgage and OCWEN since the very thing that OCWEN was
2
contracting to do was, inter alia, to provide loan servicing to Plaintiffs and Class
3
Members, including assuming the statutory duty of providing them Forms 1098.
4
Plaintiffs are not in possession of this contract, but allege that it generally provides
5
that in return for compensation, OCWEN would collect payments from borrowers and
6
perform all duties associated with servicing loans such as fielding consumer questions
7
and assuming the legal duty of reporting on interest payments.
8
reasonably foreseeable to OCWEN that it could/would be held responsible in contract
9
to persons in Plaintiffs’ situation for any mistakes that OCWEN made in issuing those
10
Form 1098s. OCWEN has continually breached this contract by failing to accurately
11
report interest payments “received” by it as required by § 6050H and the definition of
12
interest under 26 U.S.C. § 163(a).
13
55.
Thus, it was
Plaintiffs were not in default on their loan and complied with all terms
14
and conditions of their contract. But even as to Class Members who might have
15
defaulted, OCWEN’s obligation to provide Forms 1098 is an independent duty arising
16
from Section 6050H and the fact that it received the interest.
17
18
56.
As a result of OCWEN’s breach of the contract, Plaintiffs and the Class
Members have been damaged as set forth above.
19
20
COUNT II
21
BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING
22
57.
Plaintiffs re-allege and hereby incorporate each and every allegation
23
contained in Paragraphs 1 through 56 of this Complaint as though fully set forth
24
herein.
25
58.
In every contract, parties have a duty to act in good faith and deal with
26
each other fairly. By virtue of both the loan agreements and servicing agreements,
27
OCWEN had such a duty to act in good faith with respect to Plaintiffs and the Class
28
Members. This included the duty to not to conceal and/or fully and unambiguously
-19CLASS ACTION COMPLAINT
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1
disclose to Plaintiffs and Class Members that the way it was treating “deferred
2
interest” payments was a change from what had historically been done, was against
3
Class Members’ interests, and contrary to established tax law.
4
59.
After receiving Plaintiffs’ and the Class Members’ mortgage interest
5
payments, OCWEN breached the implied covenant of good faith and fair dealing by
6
failing to report to the IRS payments of “deferred interest” it received from Plaintiffs
7
and Class Members consistent with IRS regulations and guidelines. This inaccurate
8
reporting caused Class Members to receive inaccurate Form 1098s thereby depriving
9
them of significant tax deductions. Further, when Plaintiffs notified OCWEN of its
10
failure to accurately report their interest payments, OCWEN had an obligation under
11
RESPA and the covenant of good faith to research their contention fully. Had it done
12
so, it would have determined that its policy was wrong and corrected it for all Class
13
Members. (Plaintiffs allege that OCWEN has always known its policy was wrong).
14
Thus, the extent OCWEN did not, at least upon receipt of Plaintiffs’ complaint,
15
reverse its course and issue corrected Form 1098s to all class members, such was a
16
further breach of the covenant of good faith and fair dealing to the third party
17
beneficiaries of OCWEN’s loan servicing contract.
18
60.
As a result of OCWEN’s breaches of the implied covenant of good faith
19
and fair dealing, Plaintiffs and the Class Members have been damaged as set forth
20
above and will be damaged in the future to the extent that they are precluded by the
21
statute of limitations from amending any of their affected tax returns.
22
61.
It is further alleged that OCWEN acted intentionally and with knowledge
23
that its reporting policies were in violation of law and took its actions, including
24
failing to disclose to its borrowers or the IRS its change in policy in those instances
25
where OCWEN acquired mortgages from persons that had previously properly
26
reported interest of Forms 1098, notwithstanding that knowledge so as to maximize its
27
own profits and avoid conflict with its borrowers and the IRS.
28
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1
62.
OCWEN committed its wrongful acts intentionally and with knowledge
2
of the harm it was doing to consumers and in a manner shocking to the conscience so
3
punitive damages should be assessed against OCWEN. Plaintiff is informed and
4
believes the financial benefit to OCWEN, and detriment to Plaintiffs and the class is in
5
the tens of millions of dollars.
6
7
COUNT III
8
UNFAIR/DECEPTIVE BUSINESS PRACTICES
9
63.
Plaintiffs re-allege and hereby incorporate each and every allegation
10
contained in Paragraphs 1 through 62 of this Complaint as though fully set forth
11
herein.
12
64.
California Business & Professions Code § 17200 et seq. (“UCL”)
13
prohibits acts of unfair competition, including any “unlawful, unfair or fraudulent
14
business act or practice.”
15
65.
As alleged above, OCWEN has been violating the terms of 26 U.S.C.
16
§ 6050H by failing to include payments of mortgage interest that were actually
17
“received” by it from Plaintiffs and Class Members. OCWEN’s practice constitutes
18
an unlawful, unfair and fraudulent business practices under the UCL and would also
19
constitute violations of similar consumer protection laws in applicable in the several
20
United states.
21
66.
However, in the event that the Court determines that the UCL either
22
cannot be applied in these circumstances outside of California, or that the differences
23
between the laws of the several states and California’s UCL are so substantial as to
24
make the administration of a class action unmanageable, then Plaintiffs asserts that a
25
separate subclass of California borrowers should be certified for all of Plaintiffs’
26
claims, including Plaintiffs’ UCL claim. This sub-class would be defined in the same
27
manner as the main class, but would be limited to Class Members with loans secured
28
by real property in California.
-21CLASS ACTION COMPLAINT
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1
67.
Plaintiffs have suffered losses of money or property as a result of
2
Defendant’s unlawful, deceptive and unfair business practices and will incur future
3
losses as a result of having to amend their tax returns. As a result of Defendant’s
4
violations of the UCL, Plaintiffs and Class Members are entitled to bring this claim for
5
injunctive and other equitable relief. And, as a part of that relief, Plaintiffs requests
6
the Court act in equity to order OCWEN to issue corrected Forms 1098, payment of
7
accountancy fees Plaintiffs and the members of the class will have to incur to correct
8
OCWEN’s wrongful prior reporting and award attorney’s fees and costs.
9
10
COUNT IV
11
DECLARATORY RELIEF
12
68.
Plaintiffs re-allege and hereby incorporate each and every allegation
13
contained in Paragraphs 1 through 67 of this Complaint as though fully set forth
14
herein.
15
69.
An actual controversy has arisen and now exists between Plaintiffs and
16
OCWEN regarding the manner in which OCWEN accounts for payments of “deferred
17
interest” as alleged above.
18
70.
Plaintiffs and Class Members contend that OCWEN has maintained a
19
policy whereby it has wrongfully under-reported to the IRS and Class Members the
20
amount of “mortgage interest” paid by them and has refused to correct these errors.
21
71.
A declaratory judgment is necessary to immediately resolve the issue as
22
to whether OCWEN is correctly reporting Class Members’ mortgage interest
23
payments on Form 1098s and whether OCWEN should be required to provide
24
corrected 1098 forms to the Class Members for all years in which its policies did not
25
conform to law.
26
72.
27
Without such a declaratory judgment, Plaintiffs and the Class Members
will have no way of complying with their legal obligation of properly reporting their
28
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1
payments of mortgage interest to the IRS in their tax returns and cannot correct
2
previous errors caused by OCWEN.
3
73.
Wherefore, declaratory relief is necessary and proper in this matter.
4
5
COUNT V
6
PRELIMINARY AND PERMANENT INJUNCTION
7
74.
Plaintiffs re-allege and hereby incorporate each and every allegation
8
contained in Paragraphs 1 through 73 of this Complaint as though fully set forth
9
herein.
10
75.
Plaintiffs are informed and believe, and thereon allege, that Defendant’s
11
wrongful actions and omissions as alleged above, if permitted to continue and occur,
12
will cause great and irreparable harm to Plaintiffs and Class Members, including the
13
inability to properly file their tax returns, which is their legal obligation.
14
76.
Wherefore, Plaintiffs, on behalf of themselves and all Class Members
15
seek: 1) to enjoin OCWEN from issuing any IRS Form 1098s that do not account for
16
its receipt of “deferred interest” received from Plaintiffs and Class Members, 2) that
17
OCWEN be compelled to issue corrected 1098 forms to all Class Members for all
18
years in which it has done so wrongfully, and 3) that as part of its equitable powers,
19
the Court order OCWEN to pay for the accounting fees necessary for all Class
20
Members to amend their tax returns to correct OCWEN’s error.
21
22
COUNT VI
23
FRAUD
24
77.
Plaintiffs re-allege and hereby incorporate each and every allegation
25
contained in Paragraphs 1 through 76 of this Complaint as though fully set forth
26
herein.
27
28
78.
As
alleged
previously,
OCWEN
knowingly
and
intentionally
misrepresented the correct amount of interest that plaintiffs paid to it in 2011 and
-23CLASS ACTION COMPLAINT
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1
2012. The date of said fraudulent representations is the date on which it issued to
2
Plaintiffs and each borrower a Form 1098 that incorrectly reported the actual interest
3
paid by the borrower. Since the date OCWEN began to intentionally issue improper
4
1098 Forms, it intentionally and knowingly concealed from its borrowers the fact it
5
was not including in the Form 1098 a portion of the interest paid by the borrower and,
6
by law, to be included in the reported amount of interest paid and received by
7
OCWEN.
8
79.
As to Plaintiffs and other class members that had been receiving proper
9
1098 Forms from originating lenders, OCWEN also intentionally concealed from
10
Plaintiffs and the other Class Members that it was wrongfully and unilaterally
11
changing the method by which interest had previously been reported on their loan by
12
these originating lenders..
13
80.
OCWEN imposed its policy of not reporting all interest received from
14
borrowers, and concealed this policy from its borrowers, in order for OCWEN to
15
receive a substantial financial windfall in not having to report as interest income to
16
OCWEN the “deferred interest” received from its borrowers.
17
calculated deferred interest on the loans it acquired as capital. But in order to benefit
18
OCWEN, OCWEN had to deny borrowers the proper and permissible tax benefit of
19
having deferred interest paid reported on Form 1098 so all borrowers could use the
20
full amount of interest paid as a tax deduction. OCWEN was under a legal duty
21
pursuant to 26 U.S.C. § 6050H to report accurately only the interest OCWEN
22
“received” during each calendar year and it was further under a duty to correct any
23
mistakes on Forms 1098 as soon as possible after determining that a wrong amount
24
had been reported.
25
81.
OCWEN cleverly
OCWEN knew that its concealment of the facts relating to its wrongful
26
interest reporting would be relied upon by Plaintiffs and the Class Members (and the
27
IRS). Borrowers and the IRS historically rely on the 1098 Forms received from the
28
person preparing the form. Additionally, it is quite easy for OCWEN to point to
-24CLASS ACTION COMPLAINT
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1
language in any loan document that states any unpaid interest will be added to the
2
principal.
3
regardless of this contractual wordsmithing, the character of the “amount added to the
4
principal;” is not changed from unpaid interest to principal. Plaintiffs’ and class
5
members’ reliance on the Forms 1098 as filed, as well as OCWEN’s explanations’
6
was clearly reasonable.
7
82.
However, what OCWEN conceals and does not tell borrowers that
Plaintiffs and the Class Members did not (and Class Members still do
8
not) know about OCWEN’s improper and illegal scheme, and, even if some tiny
9
percentage may have figured it out, like Plaintiffs, they were still powerless to avoid
10
being damaged by OCWEN’s fraud because of the IRS’ aforementioned policy of
11
rejecting any returns where the amount of interest claimed did not match the amount
12
of the lender/servicer-issued Form 1098. Each and every time OCWEN delivered to a
13
class member an incorrect Form 1098, it acted in accordance with its well devised
14
scheme and plan to benefit itself at the expense of its borrowers.
15
83.
OCWEN knew and intended that Plaintiff’ and the Class Members’
16
reliance on the incorrect Forms 1098 would cause detriment to the Plaintiffs and the
17
Class Members, but pursued its policy with callous disregard to the injuries it would
18
cause. In fact, OCWEN measured, calculated and knew that regardless of the damage
19
to the Class Members, the benefit to OCWEN was tremendous, and it was worth the
20
risk to hide, conceal and defraud its borrowers.
21
22
23
84.
As a direct and proximate result of OCWEN’s multiple concealments,
Plaintiffs and the Class Members have been damaged in an amount according to proof.
85.
For all the reasons stated above, it is undisputable that OCWEN’s
24
fraudulent concealment was undertaken with a conscious disregard of its effect on
25
Plaintiffs and the Class Members, for its own benefit without regard to the tremendous
26
financial harm to Plaintiffs and class members, and as will be shown at trial, to the
27
great financial benefit of a towering financial giant that has a significant impact on the
28
financial lives of average people in the home loan market place. This outrageous and
-25CLASS ACTION COMPLAINT
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1
knowingly fraudulent and harmful conduct shocks the conscience and rises to the level
2
of malicious and oppressive conduct for which punitive damages should be awarded.
3
This is a known and intentional pattern and practice of conduct affecting tens of
4
thousands of people which has reap huge financial benefits for OCWEN.
5
6
COUNT VII
7
NEGLIGENCE
8
9
10
11
86.
Plaintiffs re-allege and hereby incorporate each and every allegation
contained in Paragraphs 1 through 85 of this Complaint as though fully set forth
herein.
87.
As alleged previously, OCWEN was under a legal duty pursuant to 26
12
U.S.C. § 6050H to report accurately only the interest OCWEN “received” during each
13
calendar year and it was further under a duty to correct any mistakes on Forms 1098 as
14
soon as possible after determining that a wrong amount had been reported.
15
88.
Assuming that OCWEN did not intentionally report incorrect amounts of
16
mortgage interest on the Forms 1098 that it sent to plaintiffs and Class Members, it
17
negligently breached its legal duty to Plaintiffs and the Class Members to accurately
18
report the amounts of mortgage interest it received to Plaintiffs and the Class
19
Members.
20
89.
As a result of OCWEN’s negligence Plaintiffs and the Class Members
21
have been damaged in an amount according to proof. Plaintiffs and Class Members
22
did not know about OCWEN’s improper and illegal reporting, and, even if some tiny
23
percentage may have figured it out, they were still powerless to avoid being damaged
24
by OCWEN’s negligence because of the IRS’ aforementioned policy of rejecting any
25
returns where the amount of interest claimed did not match the amount of the
26
lender/servicer-issued Form 1098.
27
28
90.
If OCWEN’s reporting of incorrect amounts of mortgage interest paid by
plaintiffs and the Class Members was negligent, those amounts constituted negligent
-26CLASS ACTION COMPLAINT
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1
misrepresentations of a material fact. OCWEN made those representations without
2
reasonable ground for believing them to be true. OCWEN made those representations
3
with the knowledge and intent that plaintiffs and Class Members would rely upon the
4
amounts contained in the Form 1098 for their tax returns.
5
members’ reliance on the amounts stated in the Forms 1098 issued to them by
6
OCWEN is justifiable because OCWEN was under a legal duty to correctly calculate
7
those amounts; and Plaintiffs and class members suffered resulting damage from
8
OCWEN’s misrepresentations.
9
10
91.
Plaintiffs and class
As a direct and proximate result of OCWEN’s negligent reporting,
Plaintiffs and the Class Members have been damaged in an amount according to proof.
11
12
COUNT VIII
13
NEGLIGENT MISREPRESENTATION
14
92.
Plaintiffs re-allege and hereby incorporate each and every allegation
15
contained in Paragraphs 1 through 91 of this Complaint as though fully set forth
16
herein.
17
18
19
20
21
22
23
24
25
26
93.
If OCWEN’s reporting of incorrect amounts of mortgage interest paid by
plaintiffs and the Class Members was negligent, those amounts constituted negligent
misrepresentations of a material fact. OCWEN made those representations without
reasonable ground for believing them to be true since not only is its position contrary
to established tax law, but it is also contrary to the policy of OCWEN’s predecessor
and other major banks operating in the same industry.
OCWEN made those
representations with the knowledge and intent that plaintiffs and Class Members
would rely upon the amounts contained in the Form 1098 for their tax returns.
Plaintiffs and class members’ reliance on the amounts stated in the Forms 1098 issued
to them by OCWEN is justifiable because OCWEN was under a legal duty to correctly
27
28
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1
calculate those amounts; and Plaintiffs and class members suffered resulting damage
2
from OCWEN’s misrepresentations.
3
4
94.
As a direct and proximate result of OCWEN’s negligent reporting,
Plaintiffs and the Class Members have been damaged in an amount according to proof.
5
6
COUNT IX
7
VIOLATION OF 26 U.S.C. 6050H
8
9
10
11
95.
Plaintiffs re-allege and hereby incorporate each and every allegation
contained in Paragraphs 1 through 94 of this Complaint as though fully set forth
herein.
96.
Plaintiffs asserts that there may exist an implied private right of action to
12
enforce the terms of 26 U.S.C. § 6050H under the test established in Cort v. Ash, 422
13
U.S. 66, 78 (1975).
14
15
16
97.
To the extent an implied private right of action is found to exist on behalf
of a borrower to enforce the terms of 26 U.S.C. § 6050H, Plaintiffs allege as follows:
98.
OCWEN had a duty to accurately report to the IRS the amount of
17
mortgage interest Plaintiffs and Class Members paid to it under 26 U.S.C. § 6050H.
18
OCWEN breached this duty by intentionally failing to report payments of deferred
19
interest on the Form 1098s it issued to its borrowers, including Plaintiffs and the Class
20
Members.
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99.
As a proximate result of OCWEN’s intentional breach of its statutory
22
duty as herein alleged, Plaintiffs and Class Members have been harmed by receiving
23
inaccurate Form 1098s and have suffered damages as a result thereof as specified
24
above. Further, Plaintiffs and the Class Members have been deprived of the ability to
25
accurately report to the IRS the full amount of their mortgage interest deduction and
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are entitled to equitable relief to remedy their situation.
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PRAYER FOR RELIEF
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WHEREFORE, Plaintiffs on behalf of themselves and all Class Members, pray
for judgment and injunctive and equitable relief against OCWEN as follows:
(a)
Certification of the classes pursuant to Rule 23(b)(2) and (b)(3) of the
5
Federal Rules of Civil Procedure, certifying Plaintiffs as the
6
representative of the classes (and for the California sub-class (if
7
necessary)), and designating Plaintiffs’ counsel as counsel for the class
8
(and subclass if necessary);
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(b)
herein;
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A judicial declaration that OCWEN has committed the violations alleged
(c)
An Order requiring OCWEN to issue corrected Form 1098s to Plaintiffs
12
and to all Class Members for all years where OCWEN did not report the
13
correct amount of mortgage interest paid to it on such forms;
14
(d)
For general and special damages in an amount to be proven at time of
15
trial, including, but not limited to, accountancy fees necessary to amend
16
Class Member tax returns and/or to determine the value of any lost
17
deductions, and the value of those lost deductions;
18
(e)
appropriate;
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For punitive or exemplary damages on all causes of action where
(f)
An Order in equity (if no damages are awarded) requiring Defendant to
21
pay for the Class Members’ reasonable expenses in filing amended tax
22
returns for those years where OCWEN did not report the correct amount
23
of mortgage interest on each Class Members’ IRS Form 1098s;
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(g)
An order in equity (if no damages are awarded) requiring Defendant to
25
pay any accountancy expenses necessary to determining if they lost
26
money as a result of OCWEN’s mis-reporting of mortgage interest on
27
their Forms 1098;
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1
(h)
not accurately reflect the interest paid to it during any given year;
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3
An Order precluding OCWEN from issuing any Form 1098s which do
(i)
Prejudgment and post-judgment interest at the legal rate on any sum of
damages awarded;
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5
(j)
Attorney’s fees according to proof at time of trial;
6
(k)
Costs of suit, including expert witness fees and costs, herein incurred;
7
(l)
For such other and further relief as this Court may deem proper and just;
8
and
9
JURY TRIAL DEMAND
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Plaintiffs and all those similarly situated hereby demand a trial by jury for all
12
issues so triable and if any arbitration clause is asserted by Defendant, on the issue of
13
whether a valid arbitration agreement exists.
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15
Date: June 26, 2014
MORRIS POLICH & PURDY LLP
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By:
/s/ David J. Vendler
David J. Vendler
E-mail: [email protected]
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MICHAEL R. BROWN, APC
Michael R. Brown, Esq. (SBN 65324)
Email: [email protected]
18101 Von Karman Avenue, Suite 1900
Irvine, California 92612
Tel.: (949) 435-3888
Fax: (949) 435 3801
Attorneys for Plaintiffs GEORGE and
CLAUDIA CAMBERIS, and all others similarly
situated
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Exhibit “A”
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Case3:14-cv-02970-EMC Document1 Filed06/26/14 Page35 of 55
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Exhibit “B”
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Exhibit “C”
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Exhibit “D”
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Exhibit “E”
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Exhibit “F”
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Exhibit “G”
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