California Rep. Katie Porter has won acclaim in Washington as an unrelenting antagonist of big banks. But in the aftermath of the 2008 financial crisis, a major industry player turned to her for advice.
Porter was hired in 2015 as a consultant for Ocwen Financial Corporation, a large mortgage loan servicing provider that faced multibillion-dollar fines and penalties for deceiving homeowners. Her stint in the corporate world came shortly after she oversaw the national mortgage settlement as the state’s independent monitor and before she made her first run for Congress.
The full scope of Porter’s work for Ocwen as it was under legal siege remains unclear, but an aide said in a written statement that she was hired to advise the company in its communication with customers and did not lobby or interact directly with regulators. Nathan Click, a senior adviser to Porter, said she was enlisted to focus on the kind of work she did as California’s monitor during the mortgage settlement, such as “translating the banks’ mumbo jumbo about eligibility into a clear consumer-facing tool.”
But for Porter, a leading U.S. Senate candidate whose career was shaped and accelerated by the financial meltdown in the 2000s, her pass through the revolving door threatens to dilute her public image as an unsparing progressive who has erected walls between herself and the corporate interests she believes are infecting nearly every aspect of the American political system.
Porter’s Ocwen work appeared in an older version of her online resume but was removed within three months of her first campaign for Congress, in April 2017. It has received scant, if any, attention amid her rapid rise — from University of California, Irvine, law school professor to the state’s independent monitor and finally to member of Congress from Orange County. Now, Porter is a top contender for the seat of retiring Sen. Dianne Feinstein (D-Calif.)
Ocwen in 2013 settled with California and 48 other states for $2.1 billion stemming from allegations that between 2009 and 2012 the company deceived homeowners and engaged in robo-signing and other misconduct. At the time of that settlement, Ocwen held about 6 percent of all California underwater loans, and Porter was working as the state’s independent monitor appointed by then-Attorney General Kamala Harris to oversee the larger, $20-billion mortgage settlement with five major banks. The Ocwen settlement was finalized in 2014, while Porter was still with the state.
In 2015, she accepted the consulting role for the company while teaching at UC Irvine. The work lasted less than six months, Click said, adding that Ocwen was the only financial firm that Porter worked for. It represents an unexplored time in the career of an official who is known for her candor.
POLITICO first approached Porter’s team in May with questions about the consulting, and followed up with a formal request for information in June. Porter declined interview requests about her work for Ocwen, and advisers for her Senate campaign would not reveal how much she was paid.
An Ocwen spokesperson declined to comment, saying the company can’t share the existence or scope of its consulting contracts.
In the prepared statement, Click acknowledged Porter worked for Ocwen, a publicly-traded mortgage servicer headquartered in West Palm Beach, Fla., that today has offices and operations in the U.S., India and the Philippines. Mortgage servicers collect payments from borrowers and pass them on to the owners of the loan. Since the passage of the Dodd-Frank Wall Street reform law in 2010, Ocwen and other loan servicers have been hit with state, federal and class-action suits and large settlements for what government officials described as deceptions and shortcuts in mortgage servicing.
Click stated that Porter was approached to advise the business on how to improve its communication with customers. He said she was recommended by the NAACP’s financial literacy arm, whom Porter partnered with during her work as monitor of the national mortgage settlement.
Before taking the job with Ocwen, Porter had established herself as a national authority on consumer protection. A protégé and former law student of Sen. Elizabeth Warren (D-Mass.), Porter testified to Congress in 2008 about how mortgage servicers were taking advantage of struggling homeowners. Such firms, Porter said at the time, lacked incentives to obey the law and to charge consumers only what they owed. Porter added she was concerned about millions of families whose debts were being collected by the likes of Ocwen and other firms whose representatives weren’t present at the May 2008 hearing.
Nearly four years later, Harris announced the appointment of Porter as California’s monitor after the big banks committed billions in homeowner and borrower benefits in the state. Harris at the time described Porter’s role as central to ensuring that hundreds of thousands of Californains benefited from the banks’ settlement.
In its statement, Porter’s team said that during the mortgage settlement she held companies to account for sending out confusing communications. Aides pointed to reports about her time as monitor “which outlined examples of good and bad bank communications and documented how the monitor staff pushed companies to improve their communications — resulting in much better outcomes for both consumers and companies in the process,” Click said.
While she was serving as monitor, Porter gave an interview to The Wall Street Journal where she contended that the settlements and subsequent changes undoubtedly improved industry practices. But she argued the industry continued to suffer from “incompetence” due to under-investment in technology and the lack of a common platform to handle the transfer of loans from one servicer to another.
“A lot of what debtors and their counsel experience as sort of morally bad conduct by servicers is actually incompetence driven by under-investment in technology,” she said. “The mortgage servicer is not setting out to do this kind of stuff, not these days, not in the regulatory climate we’re in now.”
She listed the 2014 Journal interview on the same resume that included her Ocwen work and pointed to it in her statement to POLITICO.
Porter wrapped up her time as monitor late in 2014. The following year, she took the job with Ocwen. “The company hired her because it said it wanted to make these kinds of improvements,” Click said, and she was asked to draw on her knowledge.
“But,” he added, “the project never took off.”
Porter’s aides declined to say how and precisely why the arrangement with the company ended, but added that she disclosed the work in accordance with University of California policies. A representative for UC Irvine said it would take likely until late August to respond to POLITICO’s request for Porter’s conflict-of-interest disclosure forms required by university policy.
Porter started her campaign for Congress in 2017, almost immediately landing the coveted endorsements of Warren and Harris, then a senator from California. Within three months, she scrubbed the Ocwen work from her resume. Her campaign aides declined to say why.
Porter between 2018 and 2020 also received $2,250 in contributions to her House campaign committee from Phyllis Caldwell and Jill Showell. Caldwell, a director, chaired Ocwen’s Board of Directors from March 2016 to January 2023 while Showell served as senior vice president of government and community relations at Ocwen. Neither responded to inquiries.
Two current and former top employees with Ocwen who were granted anonymity to discuss sensitive personnel matters said they either had no recollection of Porter’s work for the company or were not close enough to it to speak about its precise nature.
A former Ocwen executive said in an interview that Porter would have been an attractive hire for the company because she was a law school professor and monitor familiar with both the laws and individual regulators in charge of enforcing them — “reading a regulation and understanding how it’s applied are not always the same thing.”
“A lot of people approached us and said, ‘if you pay me $50,000, I will make your troubles go away,’” said the former executive. “We didn’t pay fixers. Pragmatically and practically speaking, we couldn’t be sure if that was true” — meaning something they could really do. “What we preferred is somebody who had an attractive background who knew what they were talking about and who understood the personalities.”