Ocwen Financial Corp. has settled charges that it violated the False Claims Act on government-insured lending and loan modifications.
The alleged violations were committed by Homeward Residential Inc., which Ocwen acquired from WL Ross & Co. LLC in late 2012.
Ocwen is accused of falsely certifying compliance with the Home Affordable Modification Program and Federal Housing Administration lending.
Private citizens sued the Atlanta-based firm on behalf of the United States, Ocwen said in a filing with the Securities and Exchange Commission.
The plaintiffs sought damages of three times the total HAMP incentives and FHA insurance claims paid on Ocwen loans.
They also sought statutory penalties of between $5,500 and $11,000 per alleged false claim.
“Ocwen was vigorously defending itself against these allegations and believes it has sound legal and factual defenses to these allegations,” the filing stated.
On Wednesday, Ocwen reportedly reached a settlement in the case.
No admission of liability or wrongdoing was made by Ocwen.
Ocwen has agreed to pay $15 million to the government and another $15 million
for the private citizens’ attorneys’ fees and costs.
Ocwen said it agreed to the settlement “in order to avoid the uncertain outcome of two trials and the additional expense and management time involved.”
The agreement, however, is still subject to final approval by the United States and the U.S. District Court — which is not assured.
“In the event the settlement in principle is not ultimately finalized and approved, the Fisher Cases would continue and we would vigorously defend the allegations made against Ocwen,” the filing stated. “If our efforts to defend were not successful, our business, financial condition, liquidity and results of operations could be materially and adversely affected.”
