""Ocwen Loan Servicing"":http://www.ocwen.com must provide $2 billion in principal reductions to underwater borrowers and refund $125 million to nearly 185,000 borrowers who were foreclosed on, federal officials announced Thursday.[IMAGE]
The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov (CFPB) and 49 state attorneys general filed a consent order with a federal court requiring Ocwen to remedy what the complaint says is ""systemic misconduct at every stage of the mortgage servicing process"" with the $2.125 billion in restitution.
The nation's fourth-largest mortgage servicer and largest nonbank servicer has been the subject of intense regulatory scrutiny for years, according to officials.[COLUMN_BREAK]
In early 2012, examinations by the Multistate Mortgage Committee, comprised of state financial regulators, identified potential violations at Ocwen. Separately, the Federal Trade Commission referred its investigation of Ocwen to the CFPB after the bureau opened in July 2011. CFPB teamed up with state attorneys general and state regulators to investigate the issues identified, culminating in Thursday's multi-jurisdictional settlement and consent order.
According to the CFPB's statement, ""The CFPB and its partner states believe that Ocwen was engaged in significant and systemic misconduct that occurred at every stage of the mortgage servicing process.""
The bureau's statement goes on to cite specific violations of the law outlined in the official complaint filed with the D.C. federal district court such as failing to accurately apply payments, unauthorized fee assessments, impeding borrowers' loss mitigation efforts, and robo-signing court documents in foreclosure cases.
""Ocwen's violations of consumer financial protections put thousands of people across the country at risk of losing their homes,"" according to the CFPB.
Ocwen said in a regulatory filing that it established a reserve in the second quarter which is expected to cover all but approximately $0.5 million of its direct payment obligations in connection with the agreement.