Indiana Part of Major Mortgage AgreementPosted: Updated:
Attorney General Greg Zoeller has announced Indiana will share in a more than $2.1 billion joint settlement among 48 states and a Georgia-based home loan company. A total of up to $18.6 million could to go toward reducing the principal on mortgages of affected Hoosier borrowers. December 19, 2013
INDIANAPOLIS, Ind. - Ocwen Financial Corporation of Georgia and its subsidiary, Ocwen Loan Servicing, have agreed to a $2.1 billion joint state-federal settlement with Indiana Attorney General Greg Zoeller, 48 additional attorneys general, and the Consumer Financial Protection Bureau (CFPB).
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.
Ocwen will provide $2 billion in first lien principal reduction to borrowers nationwide, including borrowers in Indiana who are projected to benefit with principal reductions worth up to $18.6 million. Additionally, 2,957 borrowers in Indiana who experienced a foreclosure sale 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.
"This settlement with the nation's fourth largest mortgage servicer stems from a massive civil law enforcement investigation and initiative that includes state attorneys general, state mortgage regulators and the CFPB," Zoeller said. "It's critical for state and federal partners to work together and use the resources available to ensure borrowers are being treated fairly and mortgage servicers are held accountable."
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."
Through a court order, the settlement holds Ocwen accountable for past mortgage servicing and foreclosure abuses, provides relief to homeowners, and prevents future fraud and abuse. 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.
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 and created significant new servicing standards.
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.
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.
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.
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. More information will be made available as the settlement programs are implemented.
For more information on the agreement visit www.IndianaConsumer.com or visit www.CFPB.gov.