-joint state-federal settlement means an estimated $14 million for Missourians in principal reductions and cash payments—
Jefferson City, Mo. – December 19, 2013 – (RealEstateRama) — Attorney General Chris Koster today announced a settlement with Ocwen Financial Corporation of Atlanta and its subsidiary, Ocwen Loan Servicing that will mean principal reductions for Missourians as well as payments for up to 3,400 Missourians who lost their homes to foreclosure.
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.
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 joint state-federal settlement with the nation’s fourth-largest mortgage servicer is worth $2.1 billion overall, and includes 48 additional states and the District of Columbia, as well as the federal Consumer Financial Protection Bureau (CFPB).
“The settlement payments and principal reductions are designed to provide relief to Missourians for the mortgage servicing abuse they endured, and to help some homeowners facing foreclosure to remain in their homes,” said Koster. “My office will continue to hold servicers accountable and ensure that they treat borrowers fairly.”
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 Missouri, Ocwen will provide troubled borrowers with an estimated $10.5 million in first lien principal reductions, and 3,435 foreclosed loans will be eligible for cash payments. The payment amount, which is contingent on the number of consumers who submit valid claims, is projected to exceed $1,000.
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.
The National Mortgage Settlement, a three-year agreement reached in 2012 with the attorneys general of 49 states and the District of Columbia, the federal government, and five mortgage servicers (Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo), has so far provided more than $51 billion in relief to distressed homeowners, including $250 million to 6,259 Missouri homeowners, and created significant new servicing standards.
The Ocwen settlement does not grant immunity from criminal offenses and 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.
Ocwen Agreement Highlights
Ocwen commits to $2 billion in first-lien principal reduction.
Ocwen pays $125 million cash to borrowers associated with 183,984 foreclosed loans.
Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards.
An independent monitor will oversee implementation of the settlement to ensure compliance.
The government can pursue civil claims outside of the agreement, and any criminal case; borrowers and investors can pursue individual, institutional or class action cases regardless of the agreement.
Ocwen pays $2.3 million for settlement administration costs.
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.
For more information on the agreement contact Attorney General Koster’s mortgage hotline at 855-870-7676