The largest nonbank mortgage loan servicer in the country, Ocwen Financial Corporation, has been ordered to pay $2 billion nationwide in loan modification relief to its customers and $125 million in refunds to consumers whose homes were foreclosed, according to the Consumer Financial Protection Bureau (CFPB).
Since 2009, Ocwen is accused of taking advantage of homeowners with shortcuts and unauthorized fees and allegedly deceiving consumers about loan modifications, according to the CFPB.
Maryland Attorney General Douglas Gansler announced Thursday the state of Maryland is slated to receive $88 million of the national settlement.
“Thousands more Maryland families will be able to stay in their homes or get other relief from challenging financial circumstances as a result of this latest effort to hold mortgage servicing companies accountable for the abuses that led to the foreclosure crisis,” Gansler said.
Maryland has already received $1.36 billion in relief through Attorney General’s National Mortgage Settlement, according to Gansler.
Virginia Attorney General Ken Cuccinelli announced Thursday the Commonwealth is projected to receive $33 million for Virginia customers of Ocwen.
"What we found in the Ocwen case is similar to many of the problems we saw in our 2012 case with other major mortgage companies that led to the National Mortgage Settlement," Cuccinelli said. "This is part of our ongoing effort to hold mortgage servicers accountable and to ensure that deceptive and outright illegal practices are stopped and punished."
Virginia’s Office of Attorney General says borrowers should contact Ocwen to obtain more information about principal reductions and whether they qualify from the settlement.
D.C. homeowners will receive mortgage principal reductions of about $7 million under the settlement.
“The foreclosure process, especially when pursued without court oversight, depends on the integrity of the mortgage servicers responsible for preparing the documentation,” Attorney General Irvin Nathan said. “D.C. homeowners should not be at risk of losing their homes as a result of ‘robo-signed’ documents.”
The CFPB says it has new mortgage rules that will take effect in January that will establish strong protections for struggling homeowners facing foreclosure.