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Joint Release:  AG Van Hollen and DFI Secretary Peter Bildsten Announce $2.1 Billion Joint, State-Federal Settlement with Ocwen to Address Mortgage Servicing and Foreclosure Wrongs  
 

Wisconsin Consumers to Share in More than $13 Million in Principal Reductions

and Cash Payments to Foreclosed Borrowers

 

MADISON — Ocwen Financial Corporation of Atlanta, Georgia, and its subsidiary, Ocwen Loan Servicing, have agreed to a $2.1 billion joint, state-federal settlement with Attorney General J.B. Van Hollen, 48 additional states and the District of Columbia, and the Consumer Financial Protection Bureau (CFPB).  Wisconsin consumers are projected to receive more than $13 million in reductions on mortgage principal and direct cash payments from Ocwen.

 

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.

 

The settlement originated from a multi-state examination conducted by mortgage regulators in eight states. Forty-five state regulatory agencies, including the Wisconsin Department of Financial Institutions (DFI), have entered into the settlement with Ocwen.

 

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 settlement with the nation’s fourth largest mortgage servicer is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general, state mortgage regulators and the CFPB.  Through a court order, the settlement holds Ocwen accountable for past mortgage servicing and foreclosure abuses, provides relief to homeowners, and stops future fraud and abuse.

 

“With this settlement, we are holding another mortgage servicer accountable for unfair practices and working to make sure Wisconsin consumers are treated fairly in the future,” Attorney General Van Hollen said.

 

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 Wisconsin, Ocwen will provide troubled borrowers with an estimated $12 million in first-lien principal reductions, and 2,484 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.

 

“DFI takes very seriously its role to protect Wisconsin consumers from deceptive practices such as those used by Ocwen,” DFI Secretary Peter Bildsten said. “This settlement sends a strong message to other financial institutions that such practices will not be tolerated.”

 

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 announced 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 and created significant new servicing standards.  Wisconsin consumers have reaped more than $197 million in benefits from that settlement.  The U.S. District Court in Washington, D.C., entered the consent judgments on April 5, 2012.

 

Ocwen Agreement Highlights include:

  • Ocwen commits to $2 billion in first-lien principal reduction.  Wisconsin’s projected share is $12 million;
  • Ocwen pays $125 million cash to borrowers associated with 183,984 foreclosed loans.  In Wisconsin, 2,484 consumers are eligible for this payment;
  • 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.

 

The final agreement, through a consent judgment, will be filed in U.S. District Court in Washington, D.C.  It will take effect upon approval by the court.

 

Ocwen will contact borrowers directly regarding principal reduction eligibility or borrowers may contact Ocwen directly to see if they qualify under terms of this settlement.

 

Ocwen Contact Information: 

1-800-337-6695

ConsumerRelief@Ocwen.com

 

A settlement administrator will contact qualified borrowers regarding cash payments.  Eligible consumers include those foreclosed upon by Ocwen, Litton or Homeward from 2009-2011.  If you believe you may be eligible for payments but are concerned that the settlement administrator will not be able to locate you because you have moved, contact the Wisconsin Department of Justice (DOJ) Office of Consumer Protection or the Consumer Financial Protection Bureau (CFPB).  The DOJ and the CFPB also field complaints about mortgage servicing problems:

 

Wisconsin DOJ Office of Consumer Protection
www.doj.state.wi.us

(800) 998-0700 or (608) 266-1852

consumerprotection@doj.state.wi.us

 

Consumer Financial Protection Bureau

www.CFPB.gov

CFPB News Release and Settlement Documents

CFPB FAQ