Ocwen to Pay $11M for Alleged Mortgage Servicing Failures
Ocwen allegedly made mistakes servicing Fla. homeowner’s mortgages, including untimely insurance payments and force-placed insurance, says Attorney General Ashley Moody.
TALLAHASSEE, Fla. – Florida Attorney General Ashley Moody says the state secured more than $11 million in relief for Floridians harmed as a result of alleged improper mortgage servicing practices. The proposed final consent judgment with Ocwen, pending adoption by the U.S. District Court for the Southern District of Florida, resolves a lawsuit brought by the State of Florida against Ocwen Financial Corporation, Ocwen Mortgage Servicing, Inc., Ocwen Loan Servicing, LLC and PHH Mortgage Corporation.
The agreement provides at least $8.6 million in consumer relief, including $2.1 million to Floridians harmed as a result of Ocwen’s alleged servicing failures, including untimely payments of borrowers’ insurance premiums, improper imposition of lender-placed insurance and overcharging for property preservation inspections, Moody says.
Other benefits for eligible Florida borrowers include at least $1 million in mortgage loan modifications and about $5.5 million in late fee waivers. Ocwen will also pay more than $3 million in civil penalties and reimburse the attorney general office’s fees and costs.
Moody calls the settlement a “continuation of our efforts to correct harmful deficiencies in mortgage servicing practices and ensure that distressed homeowners … impacted by servicing errors receive much-needed relief.”
The proposed consent judgment resolves litigation Florida initially filed in federal court in 2017. Florida’s complaint alleged that Ocwen committed various errors in the course of servicing residential mortgage loans, including failing to accurately onboard loans onto its system of record, mishandling borrowers’ escrow accounts, overcharging borrowers’ accounts and sending misleading communications about borrowers’ accounts.
Eligible borrowers don’t need to do anything to apply for relief. The Attorney General’s Office will contact borrowers eligible for monetary payment. Ocwen will automatically apply the waiver for about 6,000 eligible borrowers.
The agreement requires Ocwen to provide Florida borrowers more than $1 million in debt forgiveness through loan modifications. The modifications include principal reductions or other forms of debt forgiveness based on eligibility criteria. Under the agreement, Ocwen must meet a minimum threshold of $1 million in debt forgiveness to avoid paying an additional $1 million penalty.
Ocwen will directly notify eligible Florida borrowers through its subsidiary, PHH Mortgage.
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