Servicing giant to pay $30 million over fraud allegations

A mortgage servicing giant has agreed to pay millions to settle allegations that it falsely certified that it was in compliance with federal rules

Servicing giant to pay $30 million over fraud allegations
Ocwen Financial disclosed today that it will pay $30 million to settle lawsuits that accused it of falsely certifying that it was in compliance with federal rules.

The servicer revealed in an SEC filing that it had reached an agreement in principle to settle two related cases, referred to collectively as the Fisher Cases, according to a HousingWire report.

The Fisher Cases involved “allegations brought by private citizens on behalf of the United States that alleged in substance that Ocwen violated the False Claims Act by falsely certifying as to compliance” with Federal Housing Administration and Home Affordable Modification Program (HAMP) rules, the company stated in the filing.

Ocwen said in its SEC filing that it was “vigorously defending itself” against the lawsuits, according to HousingWire. The company claimed that it had “sound legal and factual defenses” to the accusations. In the end, however, Ocwen agreed to settle the suits with a payment of $15 million to the U.S. government and another $15 million to cover “private citizens’ attorneys’ fees costs.”

“Ocwen agreed to the settlement, notwithstanding its belief that it has sound legal and factual defenses, in order to avoid the uncertain outcome of two trials and the additional expense and management time involved,” Ocwen stated.

Ocwen said it was setting aside $30 million for the settlement because it believes it will be approved, HousingWire reported.