Several settlements have been brokered with mortgage servicers over the last few years over questionable mortgage practices. Now, the fourth largest mortgage service in the country, Ocwen Financial Corporation and Ocwen Loan Servicing, the subsidiary of Ocwen Financial, has agreed to a $2.1 billion settlement. An estimated 1,900 New Jersey residents could receive a portion of the settlement and possibly stop foreclosure if they are in danger of losing their homes.
Ocwen is accused of giving account holders false information about account status, denying eligible homeowners loan modifications and misleading homeowners about foreclosure alternatives. Like other companies, Ocwen was also allegedly involved in the robo-signing scandal. These activities are reminiscent of accusations levied against other companies.
Ocwen also agreed to comply with laws regarding debt collection and foreclosure. The settlement money is to be used for underwater homeowners whose homes are worth less than is owed on them over the course of the next three years. For New Jersey residents, somewhere in the neighborhood of $151 million is earmarked for reductions in home loans. Some 1,887 homeowners could receive payments of $1,000 or more in cash depending on the number of valid claims submitted.
For some homeowners, this settlement could stop foreclosure and allow them to keep their homes. Still other homeowners who are not affected by the settlement may look to the bankruptcy courts for relief from their mortgage woes. Filing for bankruptcy could give a homeowner the opportunity to step back and consider whether to continue fighting to keep the home or walk away with a clean slate and a fresh start financially.
Source: nj.com, N.J. to share in $2B nationwide settlement involving Ocwen home loan servicer, Alexi Friedman, Dec. 19, 2013