Ocwen Financial Corp. will provide more than $32.7 million in principal reductions to underwater borrowers in Nevada, under a settlement announced Thursday that closes an investigation into the nation’s largest nonbank servicer of home mortgages.
“This is part of our ongoing civil law enforcement effort to hold services accountable,” Nevada Attorney General Catherine Cortez Masto said in a statement. “We will continue to take every precaution to protect Nevada homeowners.”
Masto said 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. Masto did not say how many Nevada homeowners would be helped by the settlement.
Ocwen will provide $2 billion in principal reductions nationwide, as well as refund $125 million to almost 185,000 borrowers who lost their homes to foreclosure.
The proposed order was filed Thursday in U.S. District Court for the District of Columbia by the Consumer Financial Protection Bureau and the attorneys general of Nevada and 48 other states and the District of Columbia.
“Deceptions and shortcuts in mortgage servicing will not be tolerated,” said CFPB Director Richard Cordray. “Ocwen took advantage of borrowers at every stage of the process. (This) action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity, and fairness they deserve.”
It is the latest settlement to address the allegations of fraudulent mortgage servicing practices and robo-signing. The order was announced almost two years after a $25 billion national mortgage settlement with the nation’s five-largest banks, including Bank of America Corp. and J.P Morgan Chase & Co.
As a mortgage servicer, Atlanta-based Ocwen it is responsible for collecting payments from the mortgage borrower and forwarding those payments to the owner of the loan. It handles customer service, collections, loan modifications, and foreclosures.
Ocwen specializes in servicing subprime or delinquent loans and places a major emphasis on resolving delinquency through loss mitigation or foreclosure.
Along with its purchase of Homeward Residential Holdings LLC, formerly called American Home Mortgage Servicing Inc., and Litton Loan Servicing LP, it acquired the mortgage servicing rights from some of the nation’s largest banks.
In early 2012, examinations by the Multistate Mortgage Committee, which is comprised of state financial regulators, identified potential violations at Ocwen. In addition, the Federal Trade Commission referred its investigation of Ocwen to the CFPB after the federal agency opened in July 2011.
Ocwen will contact affected borrowers directly but they can also contact the company at 1-800-337-6695, or the Nevada Attorney General’s homeowner’s help line at 1-855-457-4638 or www.homeagainnevada.gov.
Contact reporter Chris Sieroty at firstname.lastname@example.org or 702-477-3893. Follow @sierotyfeatures on Twitter.