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Mortgage servicer Ocwen will provide $11 million in relief to settle misconduct claims

By Ron Hurtibise, Sun Sentinel on

Published in Business News

Ocwen Financial Corp., based in West Palm Beach, has agreed to provide more than $11 million in cash and services to settle a lawsuit by Florida's attorney general alleging widespread misconduct by its mortgage servicing business.

The settlement was announced in separate statements by the Attorney General's Office and Ocwen.

It follows years of accusations from across the United States that Ocwen routinely abused its mortgage customers with, according to the attorney general's 2017 civil complaint, illegal foreclosures, misapplied mortgage payments, failure to make insurance payments from borrowers' escrow accounts and overcharges to borrowers' accounts for default fees.

Even after agreeing in 2013 to clean up its practices, Ocwen continued its improper behavior, the complaint stated. It failed to properly credit borrowers with making on-time payments, resulting in late fees, negative credit reporting and inaccurately reported delinquencies. It misapplied payments and miscalculated loan balances and amounts due and communicated information to borrowers that it knew or should have known was inaccurate.

Ocwen will provide at least $8.6 million in consumer relief, including $2.1 million to Florida consumers harmed by the company's alleged servicing failures, the attorney general's statement said Thursday. Those failures include improperly imposing lender-placed insurance and overcharging for property inspections.

Ocwen will also provide at least $1 million for mortgage loan modifications and about $5.5 million in late fee waivers. The company also agreed to pay more than $3 million in civil penalties and reimbursement for the lawsuit's fees and costs.

 

In a statement, Florida Attorney General Ashley Moody called the settlement "a continuation of our efforts to correct harmful deficiencies in mortgage servicing practices and ensure that distressed homeowners who have been impacted by servicing errors receive much-needed relief - relief that is especially important in these challenging times."

In its own statement, Ocwen stressed that its agreement to settle the case was not an admission of wrongdoing. "Ocwen believes that it has sound legal and factual defenses to all of the State of Florida's claims but concluded that it is in the best interest of its stakeholders to resolve this matter without admitting liability in order to avoid the further distraction and expense of litigation," the statement said.

For Ocwen, the settlement was the second in less than a decade with Florida's top prosecutor.

In 2013, Florida was among 48 states and the federal Consumer Financial Protection Bureau that secured a $2 billion settlement with Ocwen over similar allegations. Then-Attorney General Pam Bondi said at the time that $342 million of the money would be sent to 26,000 Florida consumers, with each eligible to receive more than $1,000.

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