BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $3.7 million settlement on Monday with a mortgage servicer to resolve allegations it failed to provide certain notices to homeowners and unlawfully foreclosed on certain properties.
Ocwen Financial Corporation allegedly failed to follow state law for notices and mortgage assignments in the handling of certain mortgage loans. Ocwen allegedly failed to send state-mandated notices to homeowners in default and failed to execute proper mortgage assignments. Additionally, Litton Home Servicing Limited Partnership, a company acquired by Ocwen, allegedly initiated foreclosures when it did not hold the actual mortgages.
Coakley's office alleged that Litton's conduct resulted in void foreclosures that affected 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. "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, Ocwen will pay $3 million to Massachusetts borrowers and $700,000 to the state. Ocwen also agreed to properly execute documents filed in connection with foreclosure proceedings and mail notices to residents that comply with state statutes and regulations.