FOR IMMEDIATE RELEASE
NEWS RELEASE
December 19, 2013
For More Information, contact:
Luther Strange
Joy Patterson (334) 242-7491
Alabama Attorney General
Claire Haynes (334) 242-7351
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AG STRANGE ANNOUNCES $2.1 BILLION NATIONAL SETTLEMENT WITH
OCWEN FINANCIAL CORPORATION ABOUT MORTGAGE SERVICING
(MONTGOMERY) – Attorney General Luther Strange today announced a $2.1 billion
national settlement with Ocwen Financial Corporation of Atlanta, and its subsidiary, Ocwen
Loan Servicing, to address mortgage issues. The joint state-federal settlement was joined by 49
states, the District of Columbia and the Consumer Financial Protection Bureau (CFPB).
The settlement terms address servicing misconduct by Ocwen, and two companies later
acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP. Ocwen
specializes in servicing high-risk mortgage loans.
According to a complaint being filed in the U.S. District Court for the District of
Columbia, the misconduct resulted in premature and unauthorized foreclosures, violations of
homeowners’ rights and protections, and the use of false and deceptive documents and
affidavits, including “robo-signing.”
The settlement with the nation’s fourth largest mortgage servicer is the result of a civil
law enforcement investigation and initiative that includes state Attorneys General, state
mortgage regulators and the CFPB. Through a court order, the settlement holds Ocwen
accountable for past mortgage servicing and foreclosure abuses, provides relief to
homeowners, and stops future fraud and abuse.
“The issues in the Ocwen case are similar to the problems uncovered in previous
mortgage servicing cases, and this settlement holds Ocwen accountable for their actions,”
Attorney General Strange said.
Under the settlement, Ocwen agreed to $2 billion in first-lien principal reduction, and
$125 million for cash payments to borrowers on nearly 185,000 foreclosed loans. In Alabama,
Ocwen will provide about 1,817 troubled borrowers with an estimated $9.4 million in first lien
principal reductions. An undetermined number of Alabama homeowners whose loans have
already been foreclosed may be eligible for cash payments. The payment amount, which is
contingent on the number of consumers who submit valid claims, is projected to exceed
$1,000.
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501 Washington Avenue Montgomery, AL 36104 (334) 242-7300
www.ago.state.al.us Page 2 of 2
Joseph A. Smith Jr., Monitor of the National Mortgage Settlement, also will oversee the
Ocwen agreement’s implementation and compliance.
The National Mortgage Settlement, a three-year agreement reached in 2012 with the
Attorneys General of 49 states and the District of Columbia, the federal government, and five
mortgage servicers (Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo),
has so far provided more than $51 billion in relief to distressed homeowners and created
significant new servicing standards. The U.S. District Court in Washington, D.C., entered the
consent judgments on April 5, 2012.
The Ocwen settlement does not grant immunity from criminal offences and would not
affect criminal prosecutions. The agreement does not prevent homeowners or investors from
pursuing individual, institutional or class action civil cases. The agreement also preserves the
authority of state Attorneys General and federal agencies to investigate and pursue other
aspects of the mortgage crisis, including securities cases.
Ocwen Agreement Highlights
Ocwen commits to $2 billion in first-lien principal reduction.
Ocwen pays $125 million cash to borrowers associated with 183,984 foreclosed loans.
Homeowners receive comprehensive new protections from new mortgage loan
servicing and foreclosure standards.
An independent monitor will oversee implementation of the settlement to ensure
compliance.
The government can pursue civil claims outside of the agreement, and any criminal
case; borrowers and investors can pursue individual, institutional or class action cases
regardless of the agreement.
Ocwen pays $2.3 million for settlement administration costs.
The final agreement, through a consent judgment, is being filed today in U.S. District
Court in Washington, D.C. If approved by a judge, it will have the authority of a court order.
Because of the complexity of the mortgage market and this agreement, which will span
a three year period, in some cases Ocwen will contact borrowers directly regarding principal
reductions. However, borrowers should contact Ocwen to obtain more information about
principal reductions and whether they qualify under terms of this settlement. Consumers may
call Ocwen toll-free at 1-800-337-6695 or send email to ConsumerRelief@Ocwen.com.
A settlement administrator will contact qualified borrowers associated with foreclosed
loans regarding cash payments. Additional information will be made available as the
settlement programs are implemented. For more information, consumers may visit
www.cfpb.gov.
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