Attorney General Pam Bondi Press Release
Attorney General Bondi and OFR Commissioner Breakspear Announce $2.1 Billion State-Federal Settlement with Ocwen Mortgage
TALLAHASSEE, Fla. –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 Bondi, 48 additional states, the District of Columbia, and the Consumer Financial Protection Bureau. The settlement resolves allegations of mortgage 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 simultaneously with the settlement agreement today in the U.S. District Court, 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.”
“This settlement, which provides Floridians with the highest principal reduction relief in the country, is the result of our continuing efforts to stop mortgage servicing and foreclosure abuses and to ensure that borrowers are treated fairly,” stated Attorney General Pam Bondi.
The Florida Office of Financial Regulation (OFR) was designated the lead state for examination of Ocwen Loan Servicing, LLC. In addition, Florida conducted separate reviews of mortgage servicers that were acquired by Ocwen. Florida led the state mortgage regulators, who are members of the Conference of State Bank Supervisors (CSBS) and/or American Association of Residential Mortgage Regulators (AARMR), in negotiating this settlement and coordinating with state attorneys general and the Consumer Financial Protection Bureau.
“I am proud of the efforts made by our team at the OFR who led the multi-state examinations and coordinated the negotiations that resulted in the settlement announced today and will bring restitution to more than 26,000 Floridians,” said OFR Commissioner Drew J. Breakspear. “The OFR is committed to smart, effective and efficient regulation of the financial services industry and ensuring those who service mortgages are held to the highest standards.”
The settlement with one of the nation’s largest mortgage servicers 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.
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 between January 1, 2009 and December 31, 2012 loans. Florida’s anticipated share of the first lien principal reduction relief is the highest in the country with an estimated $342 million in relief for Floridians. In addition, more than 26,000 foreclosed loans in Florida will be eligible to receive the cash payment. The payment amount to each eligible borrower, 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.
In February 2012, Attorney General Bondi entered a landmark $25 billion joint federal-state agreement with the nation’s five largest mortgage servicers over foreclosure abuses and unacceptable nationwide mortgage servicing practices. In addition to the terms of the national settlement agreement, Attorney General Bondi separately negotiated an agreement with the nation’s three largest mortgage servicers to ensure that a guaranteed portion of the overall settlement funds goes to Florida borrowers.
Ocwen agreement accomplishments include:
· 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; and
· Ocwen pays $2.3 million for settlement administration costs.
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.
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. The proposed Ocwen Consent Order is available at: http://files.consumerfinance.gov/f/201312_cfpb_consent-order_ocwen.pdf
A factsheet about the proposed order filed today can be found at: http://files.consumerfinance.gov/f/201312_cfpb_factsheet_ocwen.pdf"> http://files.consumerfinance.gov/f/201312_cfpb_factsheet_ocwen.pdf
Common consumer questions and answers about the order can be found at: http://files.consumerfinance.gov/f/201312_cfpb_common-questions_ocwen.pdf">http://files.consumerfinance.gov/f/201312_cfpb_common-questions_ocwen.pdf
A copy of the Ocwen complaint that the CFPB and state attorneys general filed today can be found at: http://files.consumerfinance.gov/f/201312_cfpb_complaint_ocwen.pdf">http://files.consumerfinance.gov/f/201312_cfpb_complaint_ocwen.pdf
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.