Ocwen Financial, the nation's fourth-largest collector, aka servicer, of mortgage debt, will pay more than $2 billion to mortgage borrowers to settle alleged "significant and systemic misconduct" in servicing their loans.
Regulators led by the Consumer Financial Protection Bureau, and including authorities in 49 states and the District of Columbia, accused Ocwen of several abuses - including pushing borrowers into foreclosure through servicing misconduct, deceiving consumers about foreclosure alternatives, improperly denying loan modifications and engaging in illegal foreclosure practices.
A statement from Ocwen said "the agreement...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 has been one of the fastest-growing financial companies in the wake of the subprime mortgage crisis as it has a reputation among investors and consumer advocates of doing a better job servicing mortgage loans.
Ocwen is one of five publicly traded companies overseen by Bill Erbey, who has quintupled his fortune to more than $2 billion in just the past two years. Ocwen's shares are up roughly sevenfold over the past five years.
The settlement comes nearly two years after a $25 billion "National Mortgage Settlement" involving Bank of America, Wells Fargo, JPMorgan Chase and Ally Financial (formerly GMAC) for similar issues.