The Attorney General is working hard to ensure Michigan citizens have all the information about this important settlement. Please check back to this website, as updates will be added once more information becomes available.
The current version of the Frequently Asked Questions was last updated on January 2, 2014.
Michigan Attorney General and other participating state Attorneys General entered into this settlement with Ocwen Financial – currently one of the largest mortgage loan services in the country. Like the National Mortgage Settlement entered in 2012 with the five leading bank mortgage servicers, this settlement also addresses allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. The settlement requires Ocwen to provide approximately $2.1 billion in relief to homeowners that went through foreclosure and homeowners trying to keep their homes. In addition to the monetary relief, the settlement also requires comprehensive reforms of mortgage loan servicing. These reforms will improve customer service for borrowers on a permanent basis.
There are two categories of consumer relief:
For the cash payments to borrowers that went through foreclosure, a settlement administrator has not yet been hired to oversee the claims administration process. Once the settlement administrator is in place claim forms will be sent out. For consumers seeking loan modifications, Ocwen will begin contacting consumers eligible for loan modifications in the near future.
You are eligible if:
Payments will be made based on eligible loans. More than 8,000 people in Michigan will be eligible for a cash payment.
A mortgage servicer administers mortgage loans, including collecting and recording payments from borrowers. A servicer also handles loan defaults and foreclosures, and may offer special programs to assist borrowers who have fallen behind on their loan payments.
The company that you make your monthly payment to is your mortgage servicer. Your mortgage servicers may or may not be a lending institution and may or may not own your loan.
For loan modifications, borrowers may be contacted directly by Ocwen. Even if you are not contacted, if your loan is serviced by Ocwen, you are encouraged to contact Ocwen directly to see if a loan modification is possible. You can reach Ocwen at 800-337-6695.
The Attorney General also encourages citizens to contact a free, state-certified housing counselor through the Michigan State Housing Development Authority to seek additional assistance. Visit MSHDA's website or call their toll-free hotline, 866-946-7432.
A settlement monitor has been appointed who will gather information and test whether Ocwen is living up to its promises. The settlement includes specific criteria to measure compliance and remedial steps for non-compliance. Information about the monitor and the compliance review will be available on the monitor’s website.
Borrowers who are at imminent risk of default and who meet other requirements may qualify for relief under the settlement. Additionally, new servicing standards negotiated under the settlement are designed to enhance all aspects of mortgage servicing including account accuracy, document production processes, foreclosure practices, and information provided to borrowers. Joseph A. Smith Jr., Monitor of the National Mortgage Settlement, will oversee Ocwen’s implementation and compliance with these new requirements through the Office of Mortgage Settlement Oversight.
The release of claims, found in the settlement, relinquishes particular state and federal claims related to issues addressed by the settlement. The release is narrow and limited to mortgage servicing and origination claims. States that signed this settlement may still pursue other claims against the banks, such as securities and securitization claims. States could also sue financial institutions that are not part of the settlement.
The agreement does not affect any individual's rights. A consumer may still bring an individual action through private litigation, be a part of a class action, or seek further review/relief from regulators.
No. This is a civil, not criminal, settlement, and this settlement does not prevent state or federal criminal prosecutions.
In November 2012, Attorney General Schuette charged Lorraine Brown, former president of mortgage document processor DocX, with racketeering for authorizing the fraudulent signing of mortgage documents filed in Michigan. In February 2013, Brown pled guilty to that racketeering charge; a 20 year felony. Brown was sentenced in May, 2013 to 40 months to 20 years in prison.
In addition to this criminal charge against Brown, in January 2013, Schuette reached a $2.5 million civil settlement with Lender Processing Services, Inc., the parent company of the now defunct DocX. In addition, affected consumers will have their documents corrected by LPS if necessary.
The Attorney General reserves the right to file criminal charges against anyone involved in the foreclosure crisis who broke the law. Current or former employees of companies connected to the mortgage industry with knowledge or suspicion of criminal conduct in Michigan are encouraged to contact the Attorney General's Corporate Oversight Division at 517-373-1160.
Ocwen has agreed to major reforms in how it services mortgage loans. These new servicing standards requires Ocwen to adhere to a long list of rights for those facing foreclosure. For example, borrowers will have the right to see all of their loan documents to make sure any potential foreclosure is legal and will be given every opportunity to first modify their loan before facing foreclosure. Additionally, borrowers will have the right to deal with a reliable, single point of contact from whom to obtain information throughout the process. Ocwen must have an appropriate number of well-trained staff to promptly respond to distress borrowers.
Scammers will likely attempt to use the settlement to trick people into providing their personal information or worse, scam them out of their money. If you receive an unsolicited call from someone claiming to represent Ocwen, the settlement administrator, or some other entity related to the settlement, you can identify a scam in several ways: