CONCORD — New Hampshire residents who had mortgages serviced by Ocwen Financial Corporation of Atlanta or any of its subsidiaries could be in line for a share of $6 million in principal reduction, and cash payments worth more than $1,000, as a result of a national settlement.
Ocwen must reduce loan balances for struggling homeowners and refund millions of dollars to foreclosed borrowers under a consent order with the U.S. Consumer Financial Protection Bureau and officials from 49 states and the District of Columbia.
Ocwen, the fourth-largest mortgage servicer in the country, failed to account for borrowers' payments, gave false reasons for denying loan modifications and robo-signed legal documents, according to Consumer Bureau Director Richard Cordray.
Under the settlement, Ocwen agreed to more than $2 billion in first-lien principal reduction, and $125 million for cash payments to borrowers on nearly 185,000 foreclosed loans.
In New Hampshire, Ocwen will provide troubled borrowers with an estimated $6 million in first lien principal reductions, and 1,169 borrowers will be eligible to receive a cash payment. The cash payout depends on the number of consumers who submit valid claims, but is projected to exceed $1,000 per customer, according to N.H. Attorney General Joseph Foster.
"What we found in the Ocwen case is similar to a lot of the problems we saw in our other mortgage servicer enforcement cases," Foster said. "This is part of our ongoing civil law enforcement effort to hold servicers, including Ocwen, accountable and ensure that they treat borrowers fairly."
An Ocwen spokesman said on Thursday that the company had set aside funds to cover all but about $500,000 of the required refund payments. The company agreed to the settlement, but did not admit to the allegations, according to court documents.
The settlement does not grant Ocwen immunity from criminal prosecution, nor does it prevent homeowners or investors from pursuing individual, institutional or class-action civil cases.
"In some cases, Ocwen will contact borrowers directly regarding principal reductions," Foster said. "However, borrowers should contact Ocwen to obtain more information about principal reductions and whether they qualify under terms of this settlement."
A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.
More information is available by calling the Attorney General's Mortgage Hotline at 866-522-4450; or by visiting doj.nh.gov/consumer.
Material from Reuters was used in this article.