SAN FRANCISCO – Attorney General Kamala D. Harris today announced a $2.1 billion multistate and federal settlement with Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (Ocwen) over alleged mortgage servicing misconduct.
The settlement makes California homeowners eligible to receive up to $268 million in first lien principal reductions and nearly $23 million in cash payments to borrowers.
“This settlement will help homeowners who’ve been misled while trying to modify their Ocwen mortgages,” said Attorney General Harris, “But our work isn’t done. Too many California families are still coping with uncooperative banks and mortgage service providers. My office will continue to fight on their behalf.”
The settlement resolves allegations that Ocwen engaged in robo-signing, “dual tracking” of borrowers seeking loan modifications, and other misconduct in the course of its mortgage servicing activities. The settlement also resolves similar allegations against Homeward Residential, Inc. and Litton Loan Servicing, LP, which Ocwen acquired.
Ocwen holds nearly 390,000 loans in California, of which 12% are underwater. Ocwen holds approximately 6% of all California underwater loans.