NEW YORK (TheStreet) -- Ocwen Financial (OCN), the nation's fourth-largest collector or "servicer" of mortgage debt, reached a settlement with regulators to pay more than $2 billion to mortgage borrowers over alleged "significant and systemic misconduct" in servicing their loans.
Shares of Ocwen were down 1.64% to $55.08 in mid-afternoon trading Thursday. Ocwen has been one of the fastest-growing financial companies in the wake of the subprime mortgage crisis as it has a reputation among investors and consumer advocates of doing a better job servicing mortgage loans. Its shares are up roughly sevenfold over the past five years. Ocwen is one of five publicly traded companies overseen by Bill Erbey, who has quintupled his fortune to more than $2 billion in just the past two years.
Regulators led by the Consumer Financial Protection Bureau and including authorities in 49 states and the District of Columbia accused Ocwen of a host of abuses, including pushing borrowers into foreclosure through servicing misconduct, deceiving consumers about foreclosure alternatives and improperly denied loan modifications and engaging in illegal foreclosure practices.
A statement from Ocwen said "the agreement...is in alignment with the same ultimate goals that we share with the regulators -- to prevent foreclosures and help struggling families keep their homes."
The settlement with Ocwen comes nearly two years after a $25 billion "National Mortgage Settlement" involving Bank of America (BAC), Wells Fargo (WFC), JPMorgan Chase (JPM) and Ally Financial (formerly GMAC) for similar issues.-- Written by Dan Freed in New York.