(Boise) – December 19, 2013 – (RealEstateRama) — Ocwen Financial Corporation will provide Idaho borrowers with an estimated $3.7 million in first lien mortgage principal reductions, under terms of a legal settlement, Attorney General Lawrence Wasden said. In addition, more than 900 Idaho borrowers 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 per consumer.
Ocwen Financial Corporation of Atlanta, Georgia, and its subsidiary, Ocwen Loan Servicing, agreed to the $2.1 billion settlement with Idaho, 48 additional states, the District of Columbia, and 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.
According to a 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.”
“The improper practices found in the Ocwen case were similar to those we saw in our other mortgage servicer enforcement cases,” Attorney General Wasden said. “The Ocwen settlement is a continuation of our civil law enforcement effort to hold servicers accountable and ensure that they comply with applicable law in their treatment of borrowers.”
Under the settlement, Ocwen agreed to $2 billion in first lien principal reduction, and to pay $125 million for cash payments to borrowers on nearly 185,000 foreclosed loans.
Because of the complexity of the mortgage market and this agreement, which will span a three-year period, in some cases Ocwen will contact borrowers directly regarding principal reductions. However, borrowers should contact Ocwen to obtain more information about principal reductions and whether they qualify under terms of this settlement. A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.
In addition to the principal reduction and cash payments, the settlement includes comprehensive new protections for homeowners from new mortgage loan servicing and foreclosure standards.
The Ocwen settlement does not grant immunity from criminal offenses and does not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases. The agreement also preserves the authority of state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.
The final agreement, through a consent judgment, will be filed in U.S. District Court in Washington, D.C. If approved by a judge, it will have the authority of a court order.
Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, will oversee the Ocwen agreement’s implementation and compliance through the Office of Mortgage Settlement Oversight.
Additional information is available on the Attorney General’s settlement page.
Media Contact: Bob Cooper