Ocwen Financial Corp. is close to reaching a settlement with federal regulators and it appears the giant servicer will agree to make cash payments to borrowers who were harmed during the foreclosure process.
"We are pleased to report that we have made significant progress toward an overall agreement," Ocwen president and chief executive Ron Faris said Thursday.
"We look forward to finalizing this process which we expect will occur very soon," the CEO told analysts and investors during a conference on the company's second-quarter results.
Faris noted that Ocwen was approached in February and asked by regulators to contribute toward a consumer relief fund for borrowers who were harmed during the foreclosure process.
At the time, Ocwen estimated a settlement would cost $135 million.
Now, the Atlanta-based company estimates it will cost about $64 million, considering it will receive indemnifications for the mortgage servicing rights it purchased from Homeward and Litton.
Ocwen recorded a $52.8 million expense for the settlement. The rapidly growing servicer reported $76.7 million in net income for the second quarter, up 70% from a year ago.
Office of the Comptroller of the Currency and Federal Reserve Board officials have reached agreements with 13 servicers to provide $3.6 billion in cash payments to borrowers harmed during the foreclosure process in 2009 or 2010. So far, 3.9 million checks have been sent to eligible borrowers totaling $3.4 billion.