Ocwen Financial Corp. OCN agreed to settle a couple of lawsuits that alleged it of providing misleading data related to the loans it was servicing. The company revealed this agreement in a filing with Securities and Exchange Commission (SEC).
The lawsuits were filed by Michael Fisher and the U.S. Justice Department (DoJ) in 2012. Ocwen will be paying $15 million to both Fischer and the DoJ, though the settlement is yet to receive legal approval. Notably, the company neither accepted nor denied any wrong doing.
Improper Disclosures Related to HAMP
The lawsuits, filed in the U.S. District Court for the Eastern District of Texas alleged Ocwen of failing to make required disclosures under the Home Affordable Modification Program (HAMP). The HAMP was introduced by the U.S. government following the 2008 financial crisis with an aim to help distressed homeowners avoid foreclosure.
The lawsuits claimed that Ocwen violated the False Claims Act by wrongly declaring its compliance with laws and regulations in connection with its participation in the HAMP and FHA insurance programs.
Is Ocwen on Path to Recovery?
Though Ocwen had defended itself against these allegations, it decided to resolve the matter quickly to avoid additional legal expenses.
In a statement, a spokesperson for the company said, “Even though we have solid legal and factual defenses, we decided to settle to avoid prolonged and distracting litigation and the associated legal costs. Ocwen believes the proposed settlement is in the best interests of the company, its borrowers, employees and shareholders. We look forward to returning our full focus to what we do best — helping homeowners stay in their homes.”
Earlier this year, Ocwen had paid a fine of $2 million the SEC to settle charges of misstating financial results by using a faulty methodology to calculate the value of complex mortgage assets.