CFPB and 49 states require mortgage loan servicer to pay $2 billion for systemic misconduct in mortgage servicing

The CFPB, 49 states, and the District of Columbia have entered into an agreement with Ocwen Financial Corp. the largest nonbank mortgage servicer in the country, that requires Ocwen to provide more than $2 billion in relief to homeowners. The relief will be in the form of principal reduction and refunds to customers whose homes were foreclosed. "Since 2009, Ocwen has been taking advantage of homeowners with shortcuts and unauthorized fees and deceiving consumers about loan modifications," according to the CFPB.

Ocwen specializes in handling subprime or delinquent loans. Because Ocwen services loans but does not hold loans, it cannot directly reduce the amount of principal. But Ocwen has agreed to offer and facilitate loan modifications for borrowers facing foreclosure. The CFPB explains some of the details here. The 173-page order is accessible through a pdf linked at the top of that page. The CFPB's press release is posted here.

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