Ocwen Financial to pay $2.1B in fraud settlement

Ocwen Financial, one of the largest subprime loan servicers in the U.S. and formerly based in West Palm Beach, was ordered to pay $2.1 billion to settle a lawsuit over alleged homeowner fraud.

The U.S. Consumer Financial Protection Bureau accused Ocwen of taking too long to credit borrowers’ loan payments and requiring expensive insurance policies. It cheated borrowers via “servicing shortcuts and authorized fees,” according to the bureau’s Richard Cordray. Ocwen, now headquartered in Atlanta, said it will drop mortgage balances by $2 billion and submit $125 million in cash payments to 185,000 whose properties fell into foreclosure between early 2009 and late last year.

The settlement “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. [Palm Beach Post] — Mark Maurer