SAN FRANCISCO (Legal Newsline) -- California Attorney General Kamala Harris said Thursday some state homeowners affected by the mortgage crisis could receive nearly $300 million under a nationwide settlement with a loan servicer accused of mortgage servicing misconduct.
Ocwen Financial Corporation and Ocwen Loan Servicing LLC allegedly engaged in robo-signing, dual tracking of borrowers seeking loan modification and other deceptive practices when it conducted mortgage servicing activities.
The $2.1 billion settlement, which was signed by 49 states and the District of Columbia, also resolves allegations against two companies Ocwen acquired, Litton Loan Servicing LP and Homeward Residential Inc.
Under the terms of the settlement, California homeowners will be eligible to receive up to $268 million in first lien principal reductions and close to $23 million in cash payments to borrowers.
"This settlement will help homeowners who've been misled while trying to modify their Ocwen mortgages," Harris said in a statement.
"But our work isn't done. Too many California families are still coping with uncooperative banks and mortgage service providers. My office will continue to fight on their behalf."
Ocwen holds close to 390,000 loans in California, 12 percent of which are underwater.
The nationwide settlement requires Ocwen to pay $125 million to borrowers whose homes were foreclosed between 2009 and 2012 and commit $2 billion in first lien principal reduction loan modifications during the next three years.
The Consumer Financial Protection Bureau was the lead agency for the negotiations leading to the settlement.