Ocwen home loan borrowers ask judge to approve ‘junk fees’ settlement

Onity

13/06/2024 18:12

By Mike Scarcella
       June 13 (Reuters) - Lawyers for a class of more than
300,000 home loan borrowers asked a California federal judge on
Wednesday to approve settlement to resolve "hidden junk fee"
claims against lending giant Ocwen.
    The non-traditional settlement agreement does not include a
common fund that is often a hallmark of class-action deals.
Instead, class members will be paid based on the size of their
individual claims, up to $54 million for the entire class. 
    The deal requires final approval from U.S. District Judge
Daniel Calabretta in Sacramento, with a fairness hearing
scheduled for Sept. 19.
    Ocwen, which has since changed its name to Onity Group
 ONIT.N , defended its practices in a statement, calling them
"appropriate and more cost-effective for our customers than
others used in the industry." Ocwen denied any wrongdoing in
agreeing to settle.
    The plaintiffs’ attorneys did not immediately respond to a
request for comment on Thursday. 
    In their lawsuit, the plaintiffs alleged Ocwen charged them
undisclosed “mark-up” fees as part of some property valuation
services that the company paid for, including “broker price
opinions” and “hybrid valuations.” The lawsuit accused Ocwen of
including a hidden vendor “reconciliation” service.
    The settlement places no cap on the total amount paid to any
individual class member, but Ocwen said the maximum potential
settlement is $54 million. The settlement class comprises about
330,000 borrowers across the country.
    Calabretta in March preliminarily approved the settlement,
which was reached last year after a decade of litigation and
just weeks before the start of the trial.
    The plaintiffs’ lawyers as part of the settlement said a
“large percentage” of class members are no longer affiliated
with Ocwen due to foreclosures or other events related to loan
defaults. The deal requires potential class members to contact
Ocwen.
    Class members have an 18-month window to come forward and
make claims under the terms of the deal. Ocwen also agreed to
make changes to its disclosures to borrowers.
    Individual class members who present valid claims are
expected to be paid for all their alleged overcharges, the
plaintiffs' attorneys said. So far, 9,750 class members have
submitted claims, the attorneys said.
    The lawyers said they will ask for about $7.9 million in
legal fees. 
    
    The case is David Weiner v. Ocwen Financial Corp, U.S.
District Court, Eastern District of California, No.
2:14-cv-02597-DJC-DB.
    For class: Roland Tellis and Daniel Alberstone of Baron &
Budd
    For Ocwen: Randall Luskey and Melinda Haag of Paul, Weiss,
Rifkind, Wharton & Garrison, and Richard Jacobsen of Orrick,
Herrington & Sutcliffe
    
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