Ocwen whittles servicing suits down to two with latest settlement
Now that Ocwen settled the servicing practices lawsuit brought by the Massachusetts attorney general, just two outstanding complaints remain from the 30 filed nearly two years ago.
The settlement was for $2 million, according to a press release from Massachusetts Attorney General Maura Healy. The company said it settled for a $675,000 payment, along with funding a loan modification program and certain already-completed relief that could bring that up to the amount the attorney general announced.
Ocwen separately settled with the Massachusetts Division of Banks, which regulates mortgage bankers, one year ago.
"We have agreed to resolve this matter, which covers certain legacy servicing activities, without admitting liability," the company said in a press release. "While Ocwen believes that it has sound legal and factual defenses, we concluded that settling this matter in order to avoid the distraction and expense of litigation is in the best interest of Ocwen and its constituents, and resolves another legacy matter. We are committed to serving our customers in a fair and appropriate manner, and we look forward to continuing to work proactively with our regulators and making a difference in the lives of the customers we serve."
In April 2017 Ocwen — based in West Palm Beach, Fla. — was sued by 30 state regulators and/or attorneys general, along with the Consumer Financial Protection Bureau. The CFPB case is still pending, along with a suit filed by the Florida attorney general's office working with the state's Commissioner of Financial Regulations.
Ocwen challenged the CFPB's constitutionality in response to the regulator's lawsuit.
To meet the conditions of its prior settlements, Ocwen had to switch its servicing platform to Black Knight's MSP from Altisource Portfolio Solutions. It acquired PHH, which already was on Black Knight, to speed the process. PHH had also challenged the CFPB's constitutionality in response to a $109 million fine.
Besides the cash payment, Ocwen must notify 4,000 borrowers who may be eligible to receive a loan modification. It agreed to halt foreclosure proceedings for certain homeowners to allow them time to apply for the modification, the Massachusetts attorney general's press release said.
In addition, Ocwen will also pay three times the damages for borrowers for whom the company wrongfully failed to disburse escrowed insurance premiums and reimburse borrowers who were unnecessarily charged for flood insurance policies.