Ocwen Loan Servicing Settles Over Mortgage Misconduct
A recent mortgage settlement is big news for many homeowners, according to a recent article in DSNews.com. Ocwen Loan Servicing will have to provide more than $2 billion “in principal reductions to underwater borrowers, and refund $125 million to nearly 185,000 borrowers who were foreclosed on.” The Consumer Financial Protection Bureau (CFPB) and 49 separate state attorneys general sought to force Ocwen “to remedy...systemic misconduct at every stage of the mortgage servicing process,” as stated by the language of the consent order. According to a related article in Bloomberg News, Ocwen won’t just be providing significant funds in connection with its mortgage servicing errors. Indeed, the company “will also follow specific guidelines on mortgage services and face independent monitoring of that work.”
Ocwen it the fourth-largest mortgage servicer in the U.S., according to DSNews.com, and it’s actually the “largest nonbank servicer” in the country. This isn’t the first time that the company has been under intense scrutiny. If you have been the victim of fraudulent mortgage servicing practices, you may be entitled to financial compensation. It is important to speak to an experienced Illinois foreclosure defense attorney about your case.
What Did Ocwen Do Wrong?
According to DSNews.com, Ocwen’s errors began in July 2011 when the Federal Trade Commission (FTC) opened an investigation of the company. Then, in early 2012, state financial regulators recognized possible mortgage servicing violations. Together with the CFPB, state attorney generals and regulators began a large-scale investigation that resulted in the recent settlement. The CFPB’s report emphasized how the loan servicing company’s “violations of consumer financial protections put thousands of people across the country at risk of losing their homes.”
The Los Angeles Times also reported on the settlement and emphasized that Ocwen committed many different violations that significantly impacted borrowers. For instance, Ocwen “provided false and misleading information about the status of a foreclosure at times when borrowers were actively seeking a loan modification.” In addition, the company “robo-signed” foreclosures, which simply means that Ocwen “filed documents that weren’t personally attested to by the signer.” Other commentators cite the company’s failure to apply mortgage payments to customers’ accounts, assessing unauthorized fees, and “impeding borrowers’ loss mitigation efforts.”
How will the settlement funds be disbursed? The money will go toward loan modifications and principal reductions over the course of three years, and Ocwen will also provide $127 million for a “consumer relief fund” that will be “disbursed by an independent administrator to foreclosure victims.”
Which consumers may be entitled to settlement checks? The settlement funds are intended to remedy violations that led to foreclosures between January 1, 2009 and December 21, 2012, according to the Los Angeles Times. Homeowners whose loans were serviced by Ocwen, as well as those serviced by Homeward Residential Holdings and Litton Loan Servicing may be eligible. Ocwen Loan Servicing owns all of the servicing companies. This settlement represents the largest in the history of the Consumer Financial Protection Bureau.
Have you been negatively impacted by mortgage servicing errors or fraudulent acts? You could be eligible to file a claim for financial compensation. An experienced foreclosure defense attorney at the Emerson Law Firm can discuss your case with you today. Contact us to learn more.
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