Floridians are expected to get the "highest principal reduction relief in the country," after the nation's largest non-bank mortgage loan servicer agreed to a $2.1 billion settlement to resolve misconduct allegations, Florida Attorney General Pam Bondi announced Thursday.
Ocwen Financial Corporation of Atlanta and its subsidiary, Ocwen Loan Servicing, agreed to the joint state-federal settlement with Bondi, 48 additional states, the District of Columbia, and the Consumer Financial Protection Bureau.
Florida’s anticipated share of the $2 billion in first lien principal reduction relief is the highest in the country with an estimated $342 million in relief for Floridians, Bondi said.
Owners of more than 26,000 foreclosed loans in Florida will also be eligible to receive a cash payment.
"The payment amount to each eligible borrower, which is contingent on the number of consumers who submit valid claims, is projected to exceed $1,000," according to the Florida Attorney General's office.
The settlement resolves allegations of mortgage servicing misconduct by Ocwen and two companies later acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP. An Ocwen representative could not be immediately reached for comment Thursday.
The Florida Office of Financial Regulation took the lead in examining Ocwen Loan Servicing's operations.
“I am proud of the efforts made by our team at the OFR who led the multi-state examinations and coordinated the negotiations that resulted in the settlement announced today and will bring restitution to more than 26,000 Floridians,” said OFR Commissioner Drew J. Breakspear.
The settlement "is the result of our continuing efforts to stop mortgage servicing and foreclosure abuses and to ensure that borrowers are treated fairly," Bondi said in a written statement.
Ocwen specializes in servicing high-risk mortgage loans, according to a statement released by Bondi's office.
The company was accused of misconduct that 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.'"
Joseph A. Smith, Jr., monitor of the earlier $25 billion National Mortgage Settlement that is funded by the nation's five largest mortgage lenders, will oversee the Ocwen agreement’s implementation and compliance through the Office of Mortgage Settlement Oversight.But first a federal court judge has to sign off on the settlement.
Ocwen will pay $2.3 million for settlement administration costs.
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