Tennessee Joins $2.1 Billion Joint State-Federal Settlement

To Address Ocwen’s Mortgage Servicing Problems

Thursday, December 19, 2013

Tennessee Attorney General Bob Cooper announced Thursday that Ocwen Financial Corporation of Atlanta, and its subsidiary, Ocwen Loan Servicing, have agreed to a $2.1 billion joint state-federal settlement with Tennessee, 48 additional states and the District of Columbia, and the Consumer Financial Protection Bureau.

The terms of the agreement address servicing misconduct by Ocwen, and two companies later acquired by Ocwen, Homeward Residential Inc. and Litton Home Servicing LP.  Ocwen specializes in servicing high-risk mortgage loans. 

According to the complaint filed in the U.S. District Court for the District of Columbia Thursday, the misconduct resulted in premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and the use of false and deceptive documents and affidavits, including “robo-signing.”

The agreement with the nation’s fourth largest mortgage servicer is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general, state mortgage regulators and the CFPB.  Through a consent judgment filed Thursday for the court’s approval, the agreement holds Ocwen accountable for past mortgage servicing and foreclosure abuses, provides relief to eligible homeowners through principal reduction and cash payments to eligible foreclosed borrowers, and stops future fraud and abuse.

“What we found in the Ocwen case is similar to a lot of the problems we saw in our other mortgage servicer enforcement cases,” Attorney General Bob Cooper said.  “This is part of our ongoing civil law enforcement effort to hold mortgage servicers, including Ocwen, accountable and ensure that they treat borrowers fairly.” 

Under the agreement, Ocwen agreed to $2 billion in first-lien principal reduction, and $125 million for cash payments to borrowers on nearly 185,000 foreclosed loans nationwide.  In Tennessee, Ocwen will provide troubled borrowers with an estimated $18.8 million in first-lien principal reductions, and the borrowers on 3,626 loans that were foreclosed will be eligible to receive a cash payment.  The payment amount, which is contingent on the number of consumers who submit valid claims, is projected to exceed $1,000.

Joseph A. Smith, Jr., monitor of the National Mortgage Settlement, will oversee the Ocwen agreement’s implementation and compliance through the Office of Mortgage Settlement Oversight.  The National Mortgage Settlement, which was reached in 2012 with the attorneys general of 49 states and the District of Columbia, the federal government, and five mortgage servicers (Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo), has so far provided more than $51 billion in relief nationwide to distressed homeowners and created significant new servicing standards. 

The Ocwen agreement does not grant immunity from criminal offenses and would not affect criminal prosecutions.  The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases.  The agreement also preserves the authority of state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases. 

Ocwen Agreement Highlights

Ocwen commits to $2 billion in first-lien principal reduction.
Ocwen pays $125 million cash to borrowers associated with 183,984 foreclosed loans.
Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards.
An independent monitor will oversee implementation of the settlement to ensure compliance.
The government can pursue civil claims outside of the agreement, and any criminal case; borrowers and investors can pursue individual, institutional or class action cases regardless of the agreement.
Ocwen pays $2.3 million for settlement administration costs.
 

Because of the complexity of the mortgage market and this agreement, which will span a three year period, in some cases Ocwen will contact borrowers directly regarding principal reductions. 

Borrowers should contact Ocwen at 800-337-6695 or ConsumerRelief@Ocwen.com to obtain more information about principal reductions and whether they qualify under the terms of this settlement.

A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.  More information will be made available as the settlement programs are implemented. 

For more information on the Ocwen agreement, visit www.tn.gov/attorneygeneral or www.CFPB.gov.  For more information about free foreclosure prevention counselors or mortgage assistance programs in Tennessee, struggling homeowners may visit www.tn.gov/attorneygeneral or www.KeepMyTNHome.org or call the State of Tennessee’s free Mortgage Assistance Hotline at (855) 876-7283 Monday-Friday, 9 a.m.-5 p.m. CT.


TriAlta Advisors Merges With Tandem Financial Partners

TriAlta Advisors, an Ameriprise practice, is merging with Tandem Financial Partners.   Corey Anderson, who will be an investment manager, and his wife, Tricia, an administrative assistant, bring experience in investment management as well as advanced estate planning skills.   Samuel Montgomery is also joining TriAlta Advisors. Mr. Montgomery is a graduate of Liberty ... (click for more)

Primerica Has Open House For New Location May 19

Primerica, Inc. will celebrate its new location with an open house and Chamber of Commerce ribbon cutting on Thursday, May 19, from 4-7 p.m.  The ribbon cutting will be at 4:30 p.m.   Dewayne Crawford, a national sales director, and David Walters, a regional vice president with Primerica, Inc., have expanded their office and moved to 6025 Lee Hwy., Suite 326.  Mr. ... (click for more)

Teen Shot Multiple Times On Wilson Street On Wednesday Night; Injuries "Life-Threatening"

A teenager was shot multiple times on Wilson Street on Wednesday night. The incident was in the 1900 block around 6:30 p.m. The 911 caller said the victim was on her porch. The shooter was said to be in a silver vehicle. Chattanooga Police arrived on the scene, initiated first aid and attempted to locate a crime scene. Hamilton County EMS transported the victim to ... (click for more)

Woman Tells Of Having Shots Fired At Her When She Walked Into Disorder At South Germantown Road Apartment Complex

Officer Joel Gunn of the Chattanooga Police Department and a woman who was fired at after she walked into the scene of a shooting testified in court Wednesday concerning the shooting at the Chateau Royale Apartments on South Germantown Road on April 22. Coy Sims, 48, was arrested by Officer Gunn after police were called by residents of the apartment complex. On the night of the ... (click for more)

Thankful For The Vital Role Teachers Played In My Life

Re: Roy Exum: Teachers Day Tomorrow Roy, I am especially appreciative of your poignant column written in tribute to teachers.  It made me tear up, as I have encountered both as a student and a career educator-- teachers like the second-grade teacher who said, "I wish you were my little girl" and teachers like Mrs. Poindexter.   My teachers have played such a vital ... (click for more)

Roy Exum: The DA’s Cold-Case Quest

It is clearly a job nobody can do for over an hour or two, but Neal Pinkston, working in hand with precise professionals from the county’s auditing department, is intent on doing the right thing. As I watched a revolving team of four people at a time open and study envelopes of autopsy photographs on Tuesday, the scene would have made a fascinating television documentary. But ... (click for more)