Big Mortgage Servicer Reaches Settlement

The nation’s largest nonbank mortgage servicer, Ocwen, said on Thursday that it had agreed to pay $2.1 billion to settle accusations that it improperly handled the loans of homeowners.

The settlement with the Consumer Financial Protection Bureau and 49 states covers similar ground to a $25 billion settlement made last year with the largest banks. Ocwen, which has ridden its specialty in servicing subprime loans to become the fourth-largest mortgage servicer in the country, was not included in the larger settlement because its nonbank status made it subject to different regulators.

Ocwen, a publicly traded company based in Florida, and all other mortgage servicers now fall under the oversight of the C.F.P.B., which opened in 2011.

The bulk of the money, $2 billion, will go to principle reductions for people whose loans are serviced by Ocwen. An additional $125 million will be divided among people whose homes were foreclosed on by Ocwen.

The settlement covers several types of wrongdoing between 2009 and 2012 by Ocwen and two other companies it recently acquired, Litton Loan Servicing, which used to be owned by Goldman Sachs, and Homeward Residential Holdings. The companies are accused of charging borrowers unauthorized fees, deceiving consumers about foreclosure alternatives and providing false or misleading information about the status of foreclosure proceedings.

“Deceptions and shortcuts in mortgage servicing will not be tolerated,” Richard Cordray, the director of the C.F.P.B., said in a statement. “Ocwen took advantage of borrowers at every stage of the process. Today’s action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity, and fairness they deserve.”

The agreement still has to be approved by a federal judge.

Ocwen did not respond to a request for comment. In a regulatory filing, the company said: “Ocwen previously established a reserve of $66.4 million during the second quarter of 2013 with respect to its portion of the payment into the consumer relief fund. This reserve is expected to cover all but approximately $0.5 million of Ocwen’s portion of the consumer relief fund payment.”