Ocwen Financial subsidiary PHH Mortgage will pay a total of $750,000 to six military members and increase employee training to settle Department of Justice allegations that it conducted foreclosures that violated the Servicemembers Civil Relief Act.
Each military member will receive $125,000 following a DOJ review of all of PHH’s nonjudicial foreclosures from January 2010 to September 2018. The six improper foreclosures all occurred before 2012, the DOJ said.
“We take our responsibilities to assist service members very seriously, and we regret whenever any customer experiences a hardship that could be avoided,” Ocwen spokesman John Lovallo said in a statement.
“PHH decided to settle this matter because it was in the best interest of these service members, and allows the company to move forward and avoid protracted litigation,” the statement adds.
In addition to the financial settlement, PHH must increase and provide ongoing SCRA compliance training to its employees. PHH will also request that credit bureaus remove the foreclosures from the credit reports of the servicemembers and their coborrowers.
“Our men and women in uniform deserve to be able to focus on their job of keeping our country safe without worrying about losing their homes to an unlawful foreclosure,” Assistant Attorney General Eric Dreiband said in a press release. “The Civil Rights Division is committed to protecting the rights of our service members from unlawful conduct.”
The SCRA bans foreclosure during active military service plus one year after return. Servicers seeking foreclosure then need a court order if the mortgage originated prior to the service member’s time of duty.
“The brave men and women who serve in our nation’s armed forces frequently are required to deploy and serve overseas with little notice,” U.S. Attorney Craig Carpenito said in the release. “This Office remains resolute in its commitment to honor their personal sacrifices when they do so by ensuring that service members’ rights will be protected, as the law requires, whenever duty calls. This agreement ensures that service members will be compensated for the damages they suffered when their homes were improperly foreclosed upon while they were serving our country.”
PHH was involved in a case against the Consumer Financial Protection Bureau for a possible violation of the Real Estate Settlement Procedures Act, but it was dismissed in June 2018. Ocwen acquired PHH in early October 2018 and is a wholly owned subsidiary.