AG Jepsen: Connecticut Joins in $2.1B State-Federal
Settlement with Mortgage Servicer Ocwen
Connecticut borrowers to receive an estimated $39M in principal reductions
Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, have agreed to a $2.1 billion joint state-federal settlement with Attorney General George Jepsen, 48 additional states and the District of Columbia and the federal Consumer Financial Protection Bureau.
The settlement resolves allegations of premature and unauthorized foreclosures, violations of homeowners’ rights and protections and the use of false and deceptive documents and affidavits, including “robo-signing,” by Ocwen and two companies later acquired by Ocwen – Homeward Residential, Inc. and Litton Home Servicing LP.
Under the 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.
Connecticut borrowers will receive an estimated $39,789,256 in principal reductions through the settlement, and approximately 1,612 loans will be eligible to receive a cash payment. The payment amount, which is contingent on the number of borrowers who submit valid claims, is projected to exceed $1,000.
“This settlement with Ocwen continues the important work of the 2012 National Mortgage Settlement and, while we cannot prevent every foreclosure, this will extend opportunities for relief to thousands of Connecticut borrowers,” said Attorney General Jepsen. “I’m proud of the strong partnership demonstrated yet again by a bipartisan coalition of attorneys general from around the country and by federal agencies in our joint effort to hold servicers accountable.”
The settlement will be overseen by an independent monitor to ensure the company’s compliance. Under the settlement, homeowners will receive comprehensive new mortgage loan servicing and foreclosure standards. Ocwen will pay an additional $2.3 million for settlement administration costs.
Ocwen is the country’s fourth largest mortgage servicer and specializes in servicing high-risk mortgage loans. Because of the complexity of the mortgage market and this agreement – which will span a three-year period – Ocwen may contact some borrowers directly regarding principal reductions. However, borrowers should contact Ocwen to obtain more information about principal reductions and whether they qualify under the terms of this settlement. Borrowers with questions can reach Ocwen by phone toll-free at 1-800-337-6695 or by email at ConsumerRelief@Ocwen.com.
A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments. More information will be made available as the settlement programs are implemented.
The settlement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases. It does not grant Ocwen immunity from any criminal offenses and would not affect any criminal prosecutions. It preserves the authority of attorneys general and federal agencies to investigate and pursue other aspects of the national mortgage crisis.
Attorney General Jepsen served as a member of the negotiating committee for this settlement. He also served as a member of the executive committee for the National Mortgage Settlement, a three-year agreement reached in 2012 with the attorneys general of 49 states and the District of Columbia, the federal government and five mortgage servicers. To date, the National Mortgage Settlement has provided more than $51 billion in relief to distressed homeowners nationwide, including approximately $450 million in benefits to nearly 6,300 Connecticut borrowers.
All banks continue to offer loan modifications and other relief to qualified customers. The Attorney General encouraged any Connecticut homeowner having difficulty with their mortgage to call the state Department of Banking’s Foreclosure Assistance Hotline at 1-877-472-8313 to learn about state and federal help available. They should also contact their loan servicers to discuss the possibility of achieving an affordable loan modification.
Assistant Attorneys General Joseph Chambers and Matthew Budzik, head of the Finance Department, are assisting the Attorney General with this matter.