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Rhode Island and Massachusetts are both in line to receive funds from a national settlement with Ocwen Financial Corp. for abuses over mortgage foreclosures and servicing standards.
Rhode Island will receive approximately $9.6 million, while Massachusetts will get $80 million. The relief will come from principal reductions and direct payments to those who have been foreclosed upon.
Approximately 865 Rhode Island loans that were foreclosed upon may be eligible to receive a cash payment. About 2,600 loans in Massachusetts will be eligible. The payment amount, which is contingent on the number of consumers who submit valid claims, is projected to be approximately $1,000.
Ocwen, the nation’s fourth-largest mortgage servicer, agreed to $2 billion in first-lien principal reductions and $125 million for cash payments to borrowers on nearly 185,000 foreclosed loans in the 49 states involved in the settlement.
The agreement covers Ocwen, and its acquired subsidiaries Litton Loan Servicing LP and Homeward Residential, for foreclosures that occurred between Jan. 1, 2009, through Dec. 31, 2012.
The settlement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general, state mortgage regulators and the Consumer Financial Protection Bureau. According to a complaint filed in the U.S. District Court for the District of Columbia, 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.” •