North Carolina is set to receive a $26 million slice of a $2.1 billion national settlement announced Thursday with Ocwen Financial Corp. to resolve claims that the company violated laws in its treatment of borrowers.
The Consumer Financial Protection Bureau and attorneys general from 49 states and the District of Columbia have filed a proposed court order requiring the Atlanta-based company to provide $2 billion in principal reduction to underwater borrowers, meaning those who owe more on their mortgages than their homes are worth.
The company is also being asked to refund $125 million to nearly 185,000 borrowers who have already been foreclosed upon and to adhere to new homeowner protections.
The settlement needs court approval.
N.C. Attorney General Roy Cooper said North Carolinas share of the settlement will go toward principal reduction. Also, nearly 3,500 Ocwen borrowers who were foreclosed upon in North Carolina will receive an estimated $679 to $1,235 apiece.
A press release from The Consumer Financial Protection Bureau describes Ocwen as the nations largest nonbank mortgage loan servicer.
Ocwen is accused of pushing borrowers into foreclosure through servicing errors the company made. Among other things, the company allegedly failed to timely and accurately apply payments made by borrowers. Ocwen is also accused of charging borrowers unauthorized fees and providing false or misleading information in response to consumer complaints.
Deceptions and shortcuts in mortgage servicing will not be tolerated, the bureaus director, Richard Cordray, said in a statement. Ocwen took advantage of borrowers at every stage of the process.
Under the proposed court order, Joseph Smith, monitor of the National Mortgage Settlement and a former N.C. banking commissioner, would oversee Ocwens compliance with the national settlements mortgage-servicing standards.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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