In December 2013, a national settlement resulted in mortgage relief for numerous borrowers whose mortgage accounts were serviced by Ocwen. In addition, the settlement granted specific borrowers principal reductions or cash payments.
If you feel that Ocwen is servicing your loan unfairly or illegally, or if they have wrongfully initiated foreclosure proceedings on your property, it is recommended that you consult a foreclosure attorney to explore your options.
If Ocwen has violated any state or federal laws related to mortgage servicing or foreclosure, you may have a defense against foreclosure.
History of the Ocwen Settlement
In 2012, Ocwen, the largest non-bank mortgage servicer in the country, was sued by the Consumer Financial Protection Bureau “CFPB”, in 49 states, and the District of Columbia for multiple violations of federal and state law related to servicing.
Although Ocwen has paid the fines as per the settlement, it still had to adhere to the servicing standards put forth by the settlement.
Ocwen has been found to violate the law when servicing mortgage loans, even after the multibillion-dollar settlement. This implies that some borrowers may have reasons to claim against Ocwen for unlawful practices connected to their mortgages, including illegal foreclosures. If you’ve encountered such problems, consult your state attorney general’s office and an attorney to see if you have a valid legal claim.
Despite the multibillion-dollar settlement, Ocwen has persisted in breaking the law while servicing mortgage loans. Consequently, some borrowers may still have grounds to file claims against Ocwen for illicit practices associated with their mortgage loans, such as wrongful foreclosures.
Ocwen Loan in Numbers
Ocwen Financial Corporation settled a lawsuit for mortgage servicing misconduct in 2013. They paid $291 million, and the lawsuit was initially filed in California.
Ocwen was instructed to pay $2.1 billion, out of which $125 million is to be given to borrowers who lost their homes from 2009 to 2012.
Multiple Legal Violations
The allegations against Ocwen involved breaking laws related to consumer protection and real estate at both federal and state levels, including regulations such as the Consumer Financial Protection Act and state laws on unfair and deceptive business practices.
After a thorough investigation, Owen was found to have committed several violations by state regulators and the Consumer Financial Protection Bureau (CFPB).
The violations consisted of several things: needing to promptly or accurately apply payments made by borrowers, keeping incorrect account statements, giving accurate and timely information to eligible borrowers seeking loss mitigation services, and charging fees related to default and foreclosure without authorization.
Ocwen provided false or misleading information to customers whose loans were transferred from other loan servicers. They misrepresented loss mitigation programs and relief from foreclosure, wrongly denied loan modification relief to eligible borrowers, and gave false or misleading reasons for the denial. Additionally, they still need to follow through with modifications already in process.
Who Has Benefited From The Ocwen Settlement?
From 2009-2012, individuals who were customers of Ocwen, Litton, and Homeward and owned homes or had borrowed money were eligible to receive payments.
Those who chose to receive payments did not have to give up any legal claims and could still pursue further relief.
Am I Eligible for Relief Provided by the Settlement?
If you had your home foreclosed on between January 1, 2009, and December 31, 2012, and you are an Ocwen customer, you may be eligible for a portion of the settlement.
Additionally, the property had to be a residential property consisting of 1 to 4 units. Also, the first lien’s outstanding principal balance should not have crossed specific limits based on the property type:
- $729,750 for one-unit
- $934,200 for two-unit
- $1,129,250 for three-unit
- $1,403,400 for four-unit properties
If it was foreclosed, it means that Ocwen Financial Corporation, Litton Loan Servicing LP, or Homeward was managing your loan. Additionally, you must have made at least three payments toward the loan.
To qualify for the settlement, you must either have lived in the property or have intended to make it your primary residence when the loan was initially taken out. In addition, your claim must also have been deemed valid.
Ocwen Loan Servicing Today
Although there was a lawsuit and subsequent settlement, Ocwen and its primary successor, PHH Mortgage Corporation, are still providing financing for real estate purchases and servicing mortgages.
This lawsuit remains essential. As part of the settlement, Ocwen has agreed to modify its future mortgage servicing practices, particularly for customers dealing with specific issues.
What Is The Ocwen Newest Settlement?
Although Ocwen reached an $11 million settlement with the State of Florida in October 2020, the company has persisted in mistreating its customers despite the national attention given to the lawsuit and settlement.
The Florida attorney general sued Ocwen, and as a result, they settled. The accusations against Ocwen include not giving customers credit for making on-time mortgage payments, leading to unjust late fees, which were then reported as adverse events to credit bureaus, and failing to apply for payments and calculate loan balances accurately. Additionally, they were accused of intentionally misleading borrowers with false information.
Does Ocwen service my loan?
The company you pay monthly for your mortgage is called a mortgage servicer.
To know if Ocwen services your mortgage, you can contact them at 800-449-8767.
If you lost your home due to foreclosure between January 1, 2009, and December 31, 2012, you may be eligible for a Notice Letter and Claim Form. The settlement administrator is responsible for mailing these documents to qualified borrowers. If you decide to receive payments, you will not be required to release any claims.
Loan Modifications by Ocwen
Ocwen has initiated the foreclosure process on multiple homes, and the settlement does not require them to halt this process. Nevertheless, you can check if you are eligible for a loan modification.
If you are behind on your payments or in danger of losing your home and owe more than it’s worth, you might qualify for a loan modification from Ocwen Services. The settlement requires Ocwen to offer $2 billion in principal write-down loan modifications to eligible underwater borrowers.
However, it’s important to note that not all consumers will receive this relief, as the settlement does not specify which individuals are eligible. Therefore, a loan modification is not guaranteed under this settlement.
Talk to a foreclosure defense attorney in your area for loan modification options. They can tell you more about the specific requirements of Ocwen’s loan modification program and help you explore other options if necessary.
Struggling Homeowners That Need A Loan Modification
As per the settlement terms, Ocwen was required to offer write-down loan modifications to eligible homeowners at risk of foreclosure. This aimed to provide $2 billion in principal reductions to help borrowers who owed more than their home’s worth.
A write-down loan modification would have lowered the principal balance, thus reducing the monthly payments.
Here is the Ocwen settlement website for more information.
Seeking a Loan Modification?
Suppose you completed the required modifications under this settlement but still need help making your mortgage payments, and Ocwen is your loan servicer. In that case, you may be eligible for a modification under another program.
To see if you qualify for a Flex Modification or an in-house modification option, contact a foreclosure attorney such as Babi Legal Group to find out if Fannie Mae or Freddie Mac owns your loan.
Transferred Ocwen Loans
If you have moved your mortgage account to Ocwen, there are certain things you should be aware of. First, the company has to offer protections for these transferred loans and review any requests for loss mitigation within 60 days of the transfer.
Ocwen is only allowed to initiate or persist with any foreclosure actions once this review is complete.
Who Enforces the Settlement?
The settlement has been submitted to the federal court; if approved, the court order will support it. State attorneys general can enforce the settlement in their state courts, and penalties may apply if Ocwen violates the settlement terms. Regulators in each state can also enforce orders within their jurisdiction.
As part of the agreement, an independent monitor with objective standards will supervise Ocwen’s compliance and report to the states and CFPB. This adds another layer of oversight. In addition, a monitoring committee, including state attorneys general and financial regulators, will collaborate with the independent monitor.
Overall, the Ocwen settlement relieves homeowners struggling with their mortgage payments. It requires that Ocwen offer $2 billion in principal write-down loan modifications and other protections for transferred loans. Through an independent monitor, state attorneys general and financial regulators will also ensure compliance with the settlement terms.
Suppose you are facing foreclosure or having difficulty making your mortgage payments. In that case, it is essential to explore all available options to make informed decisions about how best to protect yourself and your home. Contact us if necessary for more information regarding this settlement and other programs designed to help those in need of assistance when dealing with mortgages owned by Fannie Mae or Freddie Mac.