Mortgage servicer signs settlement
Mortgage servicing giant Ocwen will pay $225 million in refunds and loan forgiveness to Californians, settling allegations that sloppy practices led to violations of state and federal mortgage rules over the past several years.
The California Department of Business Oversight, which announced the settlement late Friday, said an independent audit of the West Palm Beach, Fla., firm’s practices found hundreds of violations. Those included not sending important notices to some borrowers, sending other notices late and not complying with a federal rule that requires lenders to lower interest rates for some active-duty military personnel.
The alleged violations took place between 2012 and 2015. During that period, Ocwen serviced more than 500,000 California mortgages, but the department did not specify the total number of mortgage borrowers harmed by Ocwen’s practices.
Ocwen will pay $5 million in penalties and fees to the state and $22 million in cash restitution to borrowers. It will also provide $198 million in loan forgiveness to borrowers over the next three years.
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