Ocwen Financial, the nation's top non-bank mortgage servicer, announced Thursday that the company has taken a $100 million dollar charge for a potential settlement regarding claims that Ocwen sent backdated foreclosure letters to thousands of borrowers. New York's Financial Services Superintendent, Benjamin Lawsky, sent a letter to Ocwen on October 21 stating that an investigation of Ocwen's servicing practices revealed that the company sent backdated notices of foreclosure to about 7,000 borrowers after the payment deadline had passed.
Ocwen initially blamed the backdated letters on computer errors. The company said that about 70 percent of the borrowers who received the backdated foreclosure letters received loan modifications and that less than 5 percent of them actually went to foreclosure. Ocwen executive chairman William Erbey left open the possibility that legal costs could drive the $100 million dollar amount higher. Ocwen posted a net loss of $73.5 million for the third quarter in its financial statement released Thursday.
The nation's economy continued to grow at a brisk clip in the third quarter, slowing down from the prior period but still beating forecasts. Gross domestic product in the United States increased at an annualized rate of 3.5 percent last quarter, according to an advance estimate from the Bureau of Economic Analysis. Economists surveyed anticipated a growth rate of 3.0 percent. The third quarter's economic advance compares to an annualized 4.6 percent growth rate in the second quarter and a contraction of 2.1 percent in the first quarter.