Md., Va. to Receive Settlement in $2B Deal Over Loan Abuses
WASHINGTON — Ocwen Financial Corp. will reduce struggling borrowers’ loan balances by $2 billion in an agreement with federal regulators and 49 states over foreclosure abuses.
Maryland is projected to receive $85.7 million as part of the agreement for first lien principal reductions for distressed borrowers. While Virginia borrowers are set to receive about $33 million as part of the multi-state settlement with the Georgia-based mortgage services company over allegations of misconduct.
Attorney General Doug Gansler has announced Maryland also will receive an additional payment projected to exceed $1,000 each for eligible Maryland borrowers whose homes have been foreclosed. Virginia Attorney General Ken Cuccinelli says the money will be provided to borrowers through mortgage principal reductions to current homeowners.
The Consumer Financial Protection Bureau and state attorneys general announced the deal Thursday, one of the largest U.S. mortgage servicers. The regulators said Ocwen pushed borrowers into foreclosure through illegal actions, such as failing to promptly and accurately credit mortgage payments.
Under the agreement, Ocwen also will refund a combined $125 million to about 185,000 borrowers who have been foreclosed upon. It also agreed to change the way it manages mortgages. The company must stop “robo-signing” of documents, the practice of automatically signing off on foreclosures without a proper review.
The agreement must be approved by a federal court in Washington.
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