(WZZM) -- You may remember the Grand Rapids area couple we told you about having trouble with the new company now servicing their mortgage. Ocwen almost immediately raised their monthly payment but the company could not or would not tell them why.
While trying to clear up the confusion,the homeowners were hit with late fees and a negative credit report; it's a story that's happened all around the country. In fact late last year, Ocwen reached a settlement with 48 states including Michigan to provide over $2 billion to customers for certain alleged practices. They include contributing to premature and unauthorized foreclosures, violating homeowners rights, and the use of false and deceptive documents.
Local reaction to the story was significant especially from others who suffered similar problems or worse.
Ocwen is a major player now, servicing mortgages from big banks all over the country. To this point, the company has been successful on Wall Street, but by all accounts, customer service has been horrible and it's not clear whether that is intentional or unintentional.
Late last year, Ocwen reached an agreement with 48 states including Michigan to provide $2 billion in relief to some customers for alleged practices that lead to premature and unauthorized foreclosures, homeowners rights being violated and the use of false and deceptive documents.
We sat down with four couples from West Michigan who have had experiences with Ocwen from as far back as 2007.
One couple lost their home in 2007 after their mortgage was purchased by Ocwen. Almost immediately, the company said they were behind in their escrow payments. The mortgage payment was raised several times to the point the couple could no longer afford it. In addition they were being hit with late fees and reported as late on their credit report. They got a new company to agree to refinance their loan, but the deal fell through after Ocwen failed to supply a pay off amount. That resulted in a short sale of their home.
Another couple lost their home when the same thing happened. After Ocwen purchased their mortgage, they say,Owcen told them there was an escrow shortage. The couple says they could never talk to the same representative and got conflicting information about why their monthly payment went up.
All the homeowners say they consulted lawyers but were told there was nothing they could do. None of the people we talked to said they had any problems with their previous mortgage company.
In December, Michigan Attorney General Bill Schuette announced the $2.1 billion nationwide deal to settle allegations of loan servicing misconduct. Under the settlement, Ocwen must provide $2 billion in first lien principal reductions to assist in modifying existing mortgages and $125 million for cash payments to borrowers who have already gone through foreclosure.
For information on the settlement and loan modification from Ocwen, you can call 1-800-337-6695 or email them at email@example.com.
Schuette also noted that the settlement does not preclude Michigan or any other state from filing criminal charges in the future should they be warranted and the settlement does not preclude individuals from pursuing their claims.
Here are some of the allegations in the settlement:
- Failed to promptly and accurately apply payments made by borrowers or to maintain accurate account statements.
- Charged unauthorized fees for default-related services.
- Gave false or misleading information to borrowers on loans that had been transferred from other servicers.
- On transferred loans with in-process trial and permanent modifications, deceptively sought to collect payments from consumer under the mortgage's original unmodified terms.
- Failed to provide correct and timely information to borrowers seeking information about loss mitigation services, including loan modifications.
- Improperly denied loan modification relief to eligible borrowers.
- Gave false or misleading reasons for loan modification denials.
- Robo-signed affidavits in foreclosure proceedings.
- Imposed force-placed insurance when the servicers knew or should have known borrowers had adequate coverage.
Source: Consumer Financial Protection Bureau
You can read more about the settlement and whether you may qualify for help by contacting the Michigan Attorney General's office. You can also file a complaint online.
The Michigan State Housing Authority that can tell you where to get local help if you are having trouble with paying your mortgage.