Ocwen Financial Corporation, already plagued with allegations that it has mishandled customers' loans, has agreed to pay $3.7 million to settle a Massachusetts probe that alleged it illegally foreclosed on properties to which it didn't hold mortgages and failed to send required notices to homeowners
One of the nation’s largest mortgage servicers has been hit with the latest in a long line of penalties. Ocwen Financial Corporation will pay $3.7 million to the state of Massachusetts to settle claims that it failed to provide homeowners with required notices and that it illegally foreclosed on properties.
Massachusetts Attorney General Martha Coakley alleged that Ocwen failed to send state-mandated notices to homeowners in default and failed to execute proper mortgage assignments. An Ocwen-owned company, Litton Home Servicing Limited Partnership, is also alleged to have initiated foreclosures on homes to which it did not hold mortgages.
“Massachusetts homeowners faced unnecessary challenges due to these companies’ failure to provide proper notices and by initiating illegal foreclosures,” Coakley said. “This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth.”
Under the settlement, the state of Massachusetts will be paid $700,000, while $3 million will be paid to homeowners.
The latest settlement is small potatoes compared to Ocwen’s other legal troubles. Plagued with allegations that it has mishandled its customers’ loans, the company is currently the subject of a class-action lawsuit and is being investigated by the state of New York for alleged servicing violations. In December, Ocwen reached a settlement with the Consumer Financial Protection Bureau in which it agreed to provide $2 billion in consumer relief after a CFPB probe found that the company “took advantage of borrowers at every stage of the process.”
Massachusetts Attorney General Martha Coakley alleged that Ocwen failed to send state-mandated notices to homeowners in default and failed to execute proper mortgage assignments. An Ocwen-owned company, Litton Home Servicing Limited Partnership, is also alleged to have initiated foreclosures on homes to which it did not hold mortgages.
“Massachusetts homeowners faced unnecessary challenges due to these companies’ failure to provide proper notices and by initiating illegal foreclosures,” Coakley said. “This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth.”
Under the settlement, the state of Massachusetts will be paid $700,000, while $3 million will be paid to homeowners.
The latest settlement is small potatoes compared to Ocwen’s other legal troubles. Plagued with allegations that it has mishandled its customers’ loans, the company is currently the subject of a class-action lawsuit and is being investigated by the state of New York for alleged servicing violations. In December, Ocwen reached a settlement with the Consumer Financial Protection Bureau in which it agreed to provide $2 billion in consumer relief after a CFPB probe found that the company “took advantage of borrowers at every stage of the process.”
