Ocwen Financial Corporation agreed to provide $3.7 million in first lien principal mortgage reductions to Idahoans who took home loans from the lender.
Ocwen will also provide a total of $2 billion in principal reductions to borrowers in 49 states participating in the lawsuit, as well as the District of Columbia. The lawsuit contended that Ocwen violated borrower rights with its mortgage servicing practices, included using false and deceptive documents and affidavits, or "robo-signing." The term was used in in similar lawsuits and settlements against lenders in the years following the housing market crash in 2008. The lawsuit claimed the Ocwen's misconduct led to premature and unauthorized foreclosures.
In addition to agreeing to grant principal reductions, Ocwen agreed to pay cash totaling $125 million to borrowers of nearly 185,000 loans. About 900 Idaho borrowers are eligible to receive payments. The Idaho Attorney General's Office, which represented the state in the lawsuit, projects payments to exceed $1,000 per Idaho consumer.
Ocwen agreed to contact eligible borrowers about principal reductions. However, the Attorney General's Office said borrowers should contact Ocwen to ask whether they qualify for reductions.
A settlement administrator will contact qualified borrowers regarding the cash payments.