West Virginia Attorney General Patrick Morrisey said some West Virginia borrowers who were impacted by the mortgage crisis will receive help through a settlement the state reached with Ocwen Financial Corp. and its subsidiary, Ocwen Loan Servicing.
In a settlement announced Dec. 19, Ocwen, the nation’s fifth-largest mortgage service provider, will provide $1.17 million in first lien principal reductions to West Virginia homeowners who had their loans serviced by the company. Additionally, 245 West Virginia homeowners who had their homes foreclosed on during the mortgage crisis will be eligible for a cash payment expected to be more than $1,000.
"This is part of our state's ongoing civil law enforcement effort to hold servicers, including Ocwen, accountable and ensure that they treat borrowers fairly,” Attorney General Morrisey said. “The company and its subsidiaries abused loan servicing standards to the detriment of vulnerable West Virginians. I am pleased homeowners in our state will receive some much-needed relief as a result of this settlement.”
The disbursement is part of a $2.1 billion settlement of a multi-state and federal lawsuit related to the mortgage foreclosure crisis. In total, 49 states and the federal Consumer Financial Protection Bureau (CFPB) said Ocwen was accountable for past mortgage servicing and foreclosure abuses. In addition to the money for consumers, the settlement provides relief to homeowners and stops future fraud and abuse.
Today’s settlement with Ocwen, which specialized in servicing high-risk mortgage loans, and its subsidiaries was filed as a consent agreement in the U.S. District Court for the District of Columbia. It still must be approved by the judge.
The agreement is part of an investigation by states and the federal government into Ocwen that began more than four years ago. The investigation concluded that Ocwen’s actions’ 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.”
Borrowers having difficulty contacting Ocwen or who have questions should contact the West Virginia Attorney General’s Office Consumer Protection Division at 800-368-8808.
Foreclosed borrowers who are eligible for the cash payment will be contacted directly by the settlement administrator, Joseph A. Smith, Jr., who will oversee the Ocwen agreement's implementation and compliance through the Office of Mortgage Settlement Oversight.
Today’s settlement with Ocwen does not grant the company immunity from criminal offenses and it does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases. It also preserves the authority of state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.