Ocwen

US orders mortgage servicer Ocwen to help borrowers with $2 bln

Dec 19 (Reuters) – U.S. officials on Thursday ordered the largest nonbank mortgage servicer to provide $2 billion in help to underwater borrowers to resolve allegations of misconduct that led to thousands of people losing their homes.

Ocwen Financial Corp must reduce loan balances for struggling homeowners and refund $125 million to foreclosed borrowers under an agreement with the U.S. Consumer Financial Protection Bureau and officials from 49 states and the District of Columbia.

Ocwen failed to account for borrowers’ payments, gave false reasons for denying loan modifications and robo-signed legal documents, the consumer bureau said.

In many cases, after Ocwen began servicing loans, it did not respect trial modifications that had already been agreed to by the lenders, consumer bureau Director Richard Cordray said.

“After examining the potential violations, we’ve concluded that Ocwen made troubled borrowers even more vulnerable to foreclosure,” Cordray said in a conference call with reporters.

Ocwen separately disclosed the agreement on Thursday and said it had already set aside funds to cover all but about $500,000 of the required refund payments.

“The agreement, which is subject to court approval, is in alignment with the same ultimate goals that we share with the regulators – to prevent foreclosures and help struggling families keep their homes,” Ocwen said in a statement.

The firm did not admit to the allegations, according to court documents.

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