Many borrowers who had mortgages that Ocwen serviced received mortgage relief from a national settlement that occurred in December of 2013. Under the settlement, certain borrowers received principal reductions or cash payments.
An investigation into Ocwen's foreclosure activities revealed extensive loan servicing misconduct, including (among other things):
To hold Ocwen accountable for these servicing violations, 49 state attorneys general, the District of Columbia, and the Consumer Financial Protection Bureau (CFPB) reached a settlement with Ocwen Financial Corp. and its subsidiary, Ocwen Loan Servicing, in December of 2013.
The settlement required Ocwen to provide the following forms of relief to eligible borrowers.
The settlement required Ocwen to pay $125 million to certain borrowers who went through a foreclosure between January 1, 2009 and December 31, 2012. To receive a cash payment, Ocwen or one of the companies purchased by Ocwen (Litton Loan Servicing LP and Homeward Residential Holdings LLC, which was previously known as American Home Mortgage Servicing, Inc. or “AHMSI”) must have been the loan servicer at the time of foreclosure.
Borrowers had to meet certain criteria to get a payout. Each successful claimant received an equal portion of the $125 million, which was around $1,150 per claimant.
The settlement also ordered Ocwen to provide $2 billion in principal reductions to eligible underwater borrowers who were at risk of foreclosure. To accomplish this, Ocwen offered write-down loan modifications to eligible borrowers. (A “write-down” loan modification reduces the principal balance on the loan. A lower principal balance results in lower monthly payments.) You can learn more about the Ocwen settlement at the CFPB's website and on the settlement website.
In addition, the settlement required Ocwen to comply with the standards for servicing loans that were developed as part of the national mortgage settlement involving Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo. While Ocwen's obligation to comply with the national mortgage settlement standards expired in early 2017, these standards are mostly included in the federal laws that went into effect on January 10, 2014.
Even after the national mortgage settlement, Ocwen continued to violate the law when servicing mortgage loans, as evidenced by numerous regulatory actions and lawsuits against the servicer.
So, again, if Ocwen currently services your mortgage and you think you're being treated unfairly or illegally—particularly if you're in foreclosure—you should talk to a lawyer as soon as possible.