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The Consumer Financial Protection Bureau’s attempt to revive a mortgage servicing misconduct lawsuit against Ocwen Financial Corp. is in choppy waters.

On Wednesday, the U.S. Court of Appeals for the Eleventh Circuit ruled that most of the watchdog’s complaints against Ocwen that occurred from January 2014 to Feb. 26, 2017, are prohibited because of a 2014 consent order. The bureau can only advance claims for alleged misconduct that are not covered by the terms of consent judgement, the Court said.

“This middle-course reading avoids the problem of rendering the settlement agreement’s enforcement mechanism meaningless, while preserving the CFPB’s authority to enforce the law,” the court’s opinion read.

CFPB’s suit against Ocwen has been thrown back to the District Court where the bureau’s nine claims against Ocwen will be evaluated on a claim-by-claim basis. The Appeals Court mentioned in its decision that out of the nine claims, one claim – that Ocwen botched escrow accounts – may have some legs and isn’t covered by an on-point servicing standard.

This claim by the CFPB alleges that Ocwen in 2014 failed to conduct escrow analyses and sent some borrowers’ escrow statements late or not at all.

The CFPB did not immediately respond to a request for comment.

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In a statement this week, Ocwen said it will continue to “vigorously defend itself.”

“We are pleased that the appellate court adopted our position and acknowledged that the CFPB cannot unilaterally ignore the provisions of the prior settlement agreement,” the servicing giant said.  

Ocwen added that it “looks forward to engaging with the District Court and providing analysis that demonstrates that each of the remaining counts in the CFPB’s complaint is barred by the 2014 consent judgement.”

In 2017, the agency announced that it was suing Ocwen for “failing borrowers at every stage of the mortgage servicing process.”

The CFPB’s lawsuit alleged that Ocwen cost borrowers money, and in some cases, their homes, as a result of years of “widespread errors, shortcuts, and runarounds” dating back to January 2014.

The bureau alleged that Ocwen botched “basic functions like sending accurate monthly statements, properly crediting payments and handling taxes and insurance.”

The current dispute stems from now-settled allegations by the CFPB that date to the early days of the watchdog agency.

In 2013, the CFPB accused Ocwen of “engaging in significant and systematic misconduct that occured at every stage of the mortgage servicing process.” The CFPB alleged that the mortgage servicer failed to timely and accurately apply payments made by borrowers, and that it charged borrowers authorized fees for default-related services. 

Those accusations were resolved with a consent order issued Dec. 17, 2013, shielding the servicer from future actions arising from the alleged practices up to that point. Ocwen also agreed to pay $2 billion in consumer relief as part of the settlement.

In recent months, the CFPB notified the mortgage industry that it is closely monitoring servicers and how they conduct themselves to help borrowers avoid foreclosures.

It’s at least the fifth time the CFPB has issued a similar warning to servicers as they navigate the end of forbearance and loss mitigation. It’s not clear if any enforcement actions have resulted from the promise of increased scrutiny.