Floridians are expected to get the “highest principal reduction relief in the country,” after the nation’s largest non-bank mortgage loan servicer agreed to a $2.1 billion settlement to resolve allegations of misconduct, Florida Attorney General Pam Bondi announced Thursday.
Ocwen Financial Corporation of Atlanta and its subsidiary, Ocwen Loan Servicing, agreed to the joint state-federal settlement with Bondi, 48 additional states, the District of Columbia and the Consumer Financial Protection Bureau.
Floridian’s share of the $2 billion in first-lien principal reduction relief – an estimated $342 million – is the nation’s highest, Bondi said.
Owners of more than 26,000 foreclosed Florida homes will be eligible to receive a cash payment as part of a $125 million pool. The payment is projected to exceed $1,000; it depends how many apply with valid claims, said the Florida Attorney General’s office.
The Florida Office of Financial Regulation took the lead in examining Ocwen Loan Servicing’s operations and coordinated the negotiations.
The settlement “is the result of our continuing efforts to stop mortgage servicing and foreclosure abuses and to ensure that borrowers are treated fairly,” Bondi said.
The settlement resolves allegations of mortgage servicing misconduct by Ocwen and two companies later acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP.
“The agreement, which is subject to court approval, is in alignment with the same ultimate goals that we share with the regulators – to prevent foreclosures and help struggling families keep their homes,” an Ocwen statement said. “Our agreement includes detailed servicing guidelines that provide welcome clarity and certainty concerning best industry practices.”
The company was accused of “premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and the use of false and deceptive documents and affidavits, including ‘robo-signing,’” according to Bondi’s office.
Joseph A. Smith Jr., monitor of the earlier $25 billion National Mortgage Settlement that is funded by the nation’s five largest mortgage lenders, will oversee the Ocwen agreement’s implementation and compliance if a federal court approves it.
© 2013 the Sun Sentinel
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