Ocwen Financial (OCN), an Atlanta-based mortgage servicer, has reached a $2bn settlement with the US Consumer Financial Protection Bureau (CFPB) and 49 states to settle the charges pertaining to its loan-processing operations and mistreated homeowners facing foreclosure.
Ocwen and its subsidiary Ocwen Loan Servicing charged borrowers unauthorized fees, misguided customers about foreclosure alternatives and offered false or misleading information about the status of foreclosure proceedings, thus violated Dodd -Frank and Consumer Protection Act, according to CFPB.
Adding that Ocwen was involved in systemic misconduct at every stage of the mortgage servicing process, CFPB director Richard Cordray said deceptions and shortcuts in mortgage servicing will not be tolerated.
"Ocwen took advantage of borrowers at every stage of the process. Today’s 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," he added.
According to the lawsuit filed in the federal district court in the District of Columbia, Ocwen’s violations of consumer financial protections put thousands of people across the country at risk of losing their homes.
Under the terms of the agreement, OCN will provide $2bn in principal reduction to underwater borrowers as well as refund $125m to the almost 185,000 borrowers who have already been foreclosed.
Additionally, the company will be also subject to supervision from an independent servicing monitor for three years, and will require to service loans in accordance with the monitor’s guidelines.