Ocwen [1], the nation's fourth largest mortgage servicer, has agreed to pay $3.7 million to resolve allegations that it failed to give notice to homeowners, and that the company unlawfully foreclosed on properties in Massachusetts. The announcement [2] came from the state's Attorney General Martha Coakley, who alleged the non-bank servicer failed to follow Massachusetts law when handling certain mortgage loans.
The Massachusetts AG charged the company with failing to send state-mandated notices to homeowners in default, as well as failing to execute proper mortgage assignments. Furthermore, a company acquired by Ocwen, Litton Home Servicing Limited Partnership, allegedly initiated foreclosures when it did not hold the actual mortgages.
The AG's office alleged that Litton's actions resulted in void foreclosure, which affected the marketability and insurability of the titles.
"Massachusetts homeowners faced unnecessary challenges due to these companies failure to provide proper notices and by initiating illegal foreclosures," Coakley said. "This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth."
Ocwen will pay $3 million to Massachusetts homeowners, while $700,000 will go directly to the state.
Additionally, the Office of the Attorney General noted, "Ocwen is required to properly execute documents filed in connection with foreclosure proceedings, and mail notices to residents that are in compliance with applicable statutes and regulations.
Ocwen could not be reached for comment.