SALEM, Ore. - Attorney General Ellen Rosenblum announced Friday Oregon's participation in a $2.1 billion settlement with Ocwen Financial Corporation and its subsidiary Ocwen Loan Servicing.
Ocwen is the nation's fourth-largest mortgage servicer, specializing in high-risk loans.
Forty-nine states, plus the District of Columbia and the federal Consumer Financial Protection Bureau, settled allegations about misconduct in the course of servicing loans.
The resulting court order will hold Ocwen accountable for past mortgage servicing and foreclosure abuses, provide relief to homeowners, and stop future fraud and abuse.
Significant terms of the settlement include the following:
- Ocwen commits to $2 billion in principal reductions.
- Ocwen pays $125 million cash to borrowers associated with more than 180,000 foreclosed loans.
- Homeowners receive comprehensive new protections through new mortgage loan servicing and foreclosure standards.
- An independent monitor will oversee implementation of the settlement to ensure Ocwen's compliance.
- The government can still pursue criminal claims, plus civil claims that fall outside of the agreement.
- Borrowers and investors can pursue individual, institutional or class action cases regardless of the agreement.
- Ocwen pays $2.3 million for settlement administration costs.
A more detailed FAQ is available at http://www.doj.state.or.us/releases/pdf/ocwen_settlement_faqs.pdf.
Eligible Oregon borrowers will enjoy an estimated $22.9 million in principal reductions – an average of about $11,000 per household. Cash payments on eligible foreclosed Ocwen loans are expected to be around $1,200.
"This settlement is part of our ongoing effort to ensure that loan servicers treat borrowers fairly, and are held accountable when they don't," Rosenblum said. "It will bring meaningful relief to many Oregon homeowners."
The Office of Mortgage Settlement Oversight will oversee Ocwen's compliance with the three-year agreement. Ocwen borrowers should call 1-800-337-6695 or email ConsumerRelief@Ocwen.com to obtain more information about principal reductions and whether they qualify under the terms of this settlement. A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.