State reaches $7M settlement with Ocwen

Ocwen Financial Corporation of Atlanta and its subsidiary, Ocwen Loan Servicing, have agreed to a $2.1-billion joint state-federal settlement with Attorney General Jim Hood, 48 additional state attorneys general and the District of Columbia as well as the Consumer Financial Protection Bureau (CFPB).

The settlement terms address servicing misconduct by Ocwen, and two companies later acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP. Ocwen specializes in servicing high-risk mortgage loans.

Under the settlement, Ocwen agreed to $2 billion in first-lien principal reduction, and $125 million for cash payments to borrowers on nearly 185,000 foreclosed loans.

In Mississippi, Ocwen will provide troubled borrowers with an estimated $7,032,362 million in first lien principal reductions, and 970 loans will be eligible to receive a cash payment. The payment amount, which is contingent on the number of consumers who submit valid claims, is projected to exceed $1,000.

According to the complaint filed in the U.S. District Court for the District of Columbia, the misconduct resulted in premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and the use of false and deceptive documents and affidavits, including “robo-signing.”

MBJ
1/7/14