New Jersey borrowers will receive more than $150 million in relief under a 49-state settlement with the nation's fourth largest mortgage servicer, which is accused of misconduct with hundreds of thousands of customers, state officials said Thursday.
The company, the Atlanta-based Ocwen Financial Corp., will pay $2.1 billion in principal reduction, cash payments and other fees under the terms of the settlement in federal court, New Jersey's acting attorney general said in a news release. The high-risk mortgage loans servicer was accused of causing premature and unauthorized foreclosures, as well as violations of homeowners' rights and protections, and of using false and deceptive documents.
Under the settlement, Ocwen will pay an estimated $151 million in first lien principal reductions in New Jersey, and nearly 2,000 loans will be eligible for a cash payment, the news release said. The settlement also includes subsidiary Ocwen Loan Servicing and two companies later acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP.
The deal is reminiscent of the National Mortgage Settlement, a three-year agreement reached in 2012 involving 49 states and five of the nation's biggest banks. The case so far has resulted in more than $51 billion in relief to distressed homeowners and created new servicing standards for mortgages.
The latest settlement results from a civil law enforcement investigation that spans agencies across 49 states and the District of Columbia., the news release said. Deputy Attorney General Lorraine K. Rak, chief of the state's Division of Law's Consumer Fraud Prosecution Section, and special Deputy Attorney General Krima Shah, handled the matter on behalf of New Jersey.
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