Cuccinelli secures $33M for victims of illegal mortgage servicing practices

Attorney General Ken Cuccinelli announced today that his office has secured a projected $33 million in principal reductions and cash payments for Virginia customers of Ocwen Financial for its illegal mortgage servicing practices, including premature and unauthorized foreclosures and the use of false documents and affidavits, including “robo-signing.”

money-newlinksCuccinelli, along with 48 additional states, the District of Columbia, and the Consumer Financial Protection Bureau (CFPB) announced the $2.1 billion dollar joint state-federal settlement with Ocwen Financial Corporation of Atlanta and its subsidiary, Ocwen Loan Servicing. Virginians are projected to receive $33,356,553 in the settlement.

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.

The settlement terms address servicing misconduct by Ocwen and two companies later acquired by the company, Homeward Residential Inc. and Litton Home Servicing LP. Ocwen specializes in servicing high-risk mortgage loans.

The settlement with the nation’s fourth largest mortgage servicer is the result of a civil law enforcement investigation that included 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.

“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.”

In Virginia, Ocwen will provide borrowers with an estimated $33 million in first lien principal reductions, and 3771 foreclosed loans 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. Under the total national 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.

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.

Ocwen has established a toll-free number and email address for borrowers with questions:

1-800-337-6695, ConsumerRelief@Ocwen.com

The attorney general has also posted Frequently Asked Questions on his web site. This document is located atag.virginia.gov, and is found by clicking on the “Ocwen Mortgage Servicing Settlement” button under “Hot Topics” on the homepage.

 

For more information on the agreement:

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