CHICAGO – The Illinois Department of Financial and Professional Regulation (IDFPR) has been an active partner in the multi-state negotiations and is gratified that Ocwen Financial Corporation accepted this settlement to ensure that homeowners who have suffered financial hardship as a result of Ocwen's business practices are compensated for the servicer's mistakes.
"We have had Ocwen on our radar since the first revelations in the summer of 2010, when reports were issued regarding potentially widespread deficiencies in the court documents presented by mortgage companies during foreclosure proceedings," said Acting Secretary Manuel Flores. "It is only fair that Ocwen, as one of the state's largest mortgage servicing companies provide reparations to the customers it has wronged."
In today's settlement, Ocwen agreed to pay $125 million to homeowners who lost their homes to foreclosure due to servicing errors and $2 billion to help homeowners reduce the principal amount due when they owe more than their homes are currently worth on the market. In Illinois approximately 25,000 current and former homeowners will receive financial reimbursement by Ocwen.
IDFPR's 2010 investigation of the 20 largest mortgage servicing companies in Illinois resulted in the Department issuing a Nine Point plan to ensure Illinois licensed firms understood what was expected of them when initiating and processing foreclosure actions.
Ocwen was among the first Illinois licensed servicing companies to agree that these common-sense expectations: making sure that actual people review the files, that those individuals actually sign statements attesting to the accuracy of the files, that notaries actually witness those signatures and that files be complete before they are forwarded for further processing, are designed to better protect all parties affected by the foreclosure process.
"The sloppy paperwork found in many foreclosure files created an unacceptable legal and financial risk for homeowners, successful bidders at foreclosure auctions, subsequent owners of foreclosed properties, and the industry," Flores said.