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Ocwen Loan Servicing, LLC

United States District Court, S.D. Texas, Houston Division

August 26, 2019

IN RE LARRY GREEN and EDRIS GREEN, Debtors. LARRY GREEN and EDRIS GREEN, Plaintiffs/Appellees,
v.
OCWEN LOAN SERVICING, LLC, Defendant/Appellant. Adversary No. 18-3351

          MEMORANDUM AND ORDER

          NANCY F. ATLAS, SENIOR UNITED STATES DISTRICT JUDGE

         This case is before the Court on the Motion for Leave to File Interlocutory Appeal (“Motion”) [Doc. # 2] filed by Ocwen Loan Servicing, LLC (“Ocwen”), to which Debtors Larry Green and Edris Green filed a Response [Doc. # 7], and Ocwen filed a Reply [Doc. # 8].[1] Having reviewed the record and the governing legal authorities, the Court denies the Motion.

         I. BACKGROUND

         On March 26, 2013, United States Bankruptcy Judge Marvin Isgur entered an Order [Doc. # 67 in BR Case 12-38016] confirming the Chapter 13 Plan proposed by Debtors Larry and Edris Green. On December 27, 2017, Judge Isgur found that Debtors had completed all payments to Ocwen required under the confirmed Chapter 13 Plan as of October 31, 2017. See Order Deeming the Mortgage Current and Directing Debtor(s) to Resume Payments [Doc. # 182 in BR Case 12-38016]. Judge Isgur ordered Debtors to begin making direct payments to Ocwen in the amount of $790.66 beginning November 1, 2017. See Id. Debtors received an Order of Discharge [Doc. # 186 in BR Case 12-38016] under 11 U.S.C. § 1328(a) on January 22, 2018.

         On November 25, 2018, the Greens filed this Adversary Proceeding. The Greens allege that they made the required payments to Ocwen through July 6, 2018, after which Ocwen refused to accept payments and initiated foreclosure proceedings. See Complaint [Doc. # 1 in Adv. No. 18-3351');">3351], ¶ 18. The Greens allege that Ocwen has continued to attempt collection of amounts that were cured in the Chapter 13 Plan and has improperly initiated foreclosure proceedings. See id., ¶ 14.

         In the Adversary Proceeding, the Greens requested a copy of all transcripts (“CFPB Transcripts”) of proceedings before the Consumer Financial Protection Bureau (“CFPB”) that were referenced and quoted in a complaint filed by the CFPB against Ocwen in the Southern District of Florida. See Joint Discovery/Case Management Plan [Doc. # 9 in Adv. No. 18-3351');">3351], p. 5. The CFPB complaint was filed in Florida on April 20, 2017, relating to a time period between 2014 and 2016. Ocwen opposed disclosure of the CFPB Transcripts, and Judge Isgur ordered briefing on the issue.

         On February 27, 2019, Judge Isgur held that the CFPB Transcripts were not “Confidential Information” that was “restricted from turnover” under the applicable federal regulations because the CFPB had used the information in the complaint in the Southern District of Florida, [2] and because the applicable regulations do not preclude Ocwen from disclosing the CFPB Transcripts pursuant to a Court order and with appropriate protective measures.[3] See Order Overruling Objections to Turnover of Transcripts (“February Order”) [Doc. # 32 in Adv. No. 18-3351');">3351]. Judge Isgur provided an opportunity for the CFPB to file any objection to the turnover of the CFPB Transcripts. See Id. Judge Isgur also imposed restrictions on the Greens' use of the information in the CFPB Transcripts if they ultimately received copies, ordering that they “may not quote from or refer to information contained solely in the transcripts except (i) in a sealed motion; or (ii) as authorized in advance by order of this Court.” See Id. There is nothing in the record suggesting the CFPB filed an objection to the turnover of the CFPB Transcripts.

         Ocwen filed an Objection to Production of CFPB Transcripts (“Objection”) [Doc. # 35 in Adv. No. 18-3351');">3351]. In the Objection, Ocwen proposed additional “protective provisions” should the CFPB Transcripts be disclosed to the Greens. See id., ¶ 27.

         On April 22, 2019, Judge Isgur issued an Order to Produce Transcripts (“April Order”) [Doc. # 39 in Adv. No. 18-3351');">3351]. Judge Isgur ordered Ocwen to produce the CFPB Transcripts only to the Greens' attorney, who was ordered to maintain them in confidence and was precluded from making any disclosures, in pleadings or otherwise, of the information in the CFPB Transcripts. See April Order, ¶¶ 1-2.

         On July 2, 2019, the Bankruptcy Court conducted a hearing on Ocwen's request for a broad, general protective order for the CFPB Transcripts. On July 3, 2019, Judge Isgur issued an Order (“July Order”) [Doc. # 52 in Adv. No. 18-3351');">3351], denying Ocwen's request for a general protective order, stating however:

If Ocwen believes [certain information concerning identified borrowers or proprietary operations processes] was disclosed in the CFPB Transcripts, it must identify the appropriate volume, page, and line numbers to the Court by July 19, 2019. The Court will then conduct an in camera review of the identified information to determine whether limited portions of the Transcripts should be protected.

         July Order, p. 2.

         On July 17, 2019, Ocwen filed a Notice of Appeal [Doc. # 55 in Adv. No. 18-3351');">3351] and the pending Motion for Leave to File Interlocutory Appeal. On July 19, 2019, Ocwen filed its Notice of Designation of Portions of Material in CFPB Transcripts Pursuant to Order [Doc. # 57 in Adv. No. 18-3351');">3351]. Consideration of Ocwen's designations remains before Judge Isgur.[4]

         By Stay Order [Doc. # 63 in Adv. No. 18-3351');">3351], entered August 6, 2019, Judge Isgur stayed the July Order, except for the paragraph giving Ocwen an opportunity to designate portions of the CFPB Transcripts for in camera review, until August 31, 2019, “or such longer date as is imposed by the United States District Court. By Order [Doc. # 5] entered ...


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