Ohio Attorney General Mike DeWine has announced that Ohio is part of the $2.1 billion multi-state settlement with the nation’s fourth largest mortgage servicer, Ocwen Financial Corporation of Atlanta, and its subsidiary, Ocwen Loan Servicing. The settlement was agreed to by 49 states, the District of Columbia, and the Consumer Finance Protection Bureau (CFPB).
“Ocwen is yet another company who abused loan servicing standards against vulnerable Ohioans throughout the mortgage financing crisis,” DeWine said. “Just as with the National Mortgage Settlement, I am pleased additional homeowners will receive much-needed relief as part of this settlement.”
The settlement addresses 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.
According to documents filed in the U.S. District Court for the District of Columbia, Ocwen’s 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.”
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 Ohio, Ocwen will provide troubled borrowers with an estimated $37,723,909 in first lien principal reductions, and 6,630 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.
As part of the settlement, Ocwen agrees to comprehensive new mortgage loan servicing and foreclosure standards. Ocwen’s compliance with these new homeowner protections will be monitored by the Office of Mortgage Settlement Oversight established in the February 2012 National Mortgage Settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo.
The Ocwen settlement does not grant immunity from criminal offenses and would 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. A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.
Homeowners who have questions about this settlement or other foreclosure and mortgage servicing issues can call the Ohio Attorney General’s Office at 800-282-0515. Ohioans can also contact Ocwen directly at 800-337-6695 or at ConsumerRelief@Ocwen.com.