The nation’s fourth largest mortgage servicer has agreed to pay Massachusetts $3.7 million to resolve claims that it failed to provide certain notices to homeowners as required by state law and that it unlawfully foreclosed on certain properties, Attorney General Martha Coakley announced yesterday.
The assurance of discontinuance, filed in Suffolk Superior Court, alleges that Litton Home Servicing Limited Partnership, a company acquired by Ocwen, failed to follow Massachusetts law for notices and mortgage assignments in the handling of certain mortgage loans. The included failures to send state-mandated notices to homeowners in default and failures to execute proper mortgage assignments, filed in the Massachusetts Registry of Deeds, as required by Massachusetts statutes. Litton also allegedly initiated foreclosures when it did not hold the actual mortgages in violation of Massachusetts law. Coakley’s office alleges that Litton’s unlawful conduct resulted in void foreclosures affecting the marketability and insurability of the titles.
"Massachusetts homeowners faced unnecessary challenges due to these companies failure to provide proper notices and by initiating illegal foreclosures," Coakley said in a statement. "This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth."
Under the terms of the settlement, $3 million will be paid to Massachusetts homeowners, and $700,000 will be paid to the commonwealth. Ocwen is also required to properly execute documents filed in connection with foreclosure proceedings, and mail notices to residents that are in compliance with applicable statutes and regulations.
Atlanta-based Ocwen Financial Corp., its subsidiary, Ocwen Loan Servicing LLC, and two companies it purchased, Litton and Homeward Residential Holdings LLC, in December entered into a $2.1 billion national settlement resulting in an estimated $80 million in principal reduction and cash payments to Massachusetts homeowners. The national settlement resolved claims of loan servicing misconduct and so-called "robo-signing" claims. Massachusetts homeowners will also receive approximately $1.5 million in cash payments from that multistate agreement.
