Ocwen Financial Reaches $2.1 Bln Settlement With Regulators Over Loan Misconduct

(RTTNews) - Loan servicing company Ocwen Financial Corp. (OCN) has Thursday reached a $2.13 billion deal with the Consumer Financial Protection Bureau as well as regulators in 49 states in the U.S. and the District of Columbia to settle claims related mishandling of mortgage loans. The settlement is subject to court approval.

Ocwen will be required to provide $2 billion in loan modification relief to its customers and $127.3 million in refunds to consumers whose homes were foreclosed along with administrative costs.

The settlement was reached on a complaint filed earlier in the day alleging that Ocwen Financial and Ocwen Loan Servicing, LLC violated, among other laws, the Unfair and Deceptive Acts and Practices laws of the Plaintiff States and the Consumer Financial Protection Act of 2010.

The largest non-bank mortgage loan servicer in the U.S. was charged of taking advantage of homeowners with shortcuts and unauthorized fees and deceiving consumers about loan modifications since 2009.

The misconduct included unfair shortcuts, unauthorized fees, deception, illegal foreclosures, and other illegal practices. The company is primarily alleged to have failed to credit borrower's mortgage payments promptly.

The settlement involves loans that were serviced by Ocwen, Litton Loan Servicing LP or Homeward Residential Holdings LLC, which were foreclosed between January 1, 2009 and December 31, 2012.

Ocwen is charged with engaging in unfair and deceptive acts or practices in violation of the federal Consumer Financial Protection Act and state laws.

Ocwen's unlawful conduct has resulted in injury to consumers who have had home loans serviced by Ocwen, Litton, and Homeward. The harm includes payment of improper fees and charges, unreasonable delays and expenses to obtain loss mitigation relief, and improper denial of loss mitigation relief.

OCN closed Thursday's regular trading session at $54.94, down $1.06 or 1.89% on a volume of 1.84 million shares.