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Foreclosure halted for thousands thanks to national settlement

The state of Maryland is slated to receive a whopping $88 million settlement as part of a national endeavor to repay borrowers for nefarious foreclosure practices. Official reports show that the state is getting a significant share of the $2.1 billion national settlement that was approved by federal agencies and state attorneys general. The settlement will be paid by Ocwen Loan Servicing, a subsidiary of Ocwen Financial Corp., according to news reports.

Maryland's Attorney General Douglas F. Gansler called the settlement a victory for homeowners throughout the state who were facing foreclosure and other mortgage issues. Now, thousands of families throughout the state will benefit from stopping foreclosure, which will likely allow them to stay in their homes. The settlement is part of a comprehensive effort to ensure that new borrowing and servicing standards prevent banks from taking advantage of everyday borrowers. These rules will also help protect borrowers against mortgage fraud. More than 27,000 Maryland families have already benefited from the national settlement.

Ocwen ranks as the country's fourth-largest mortgage provider, and the company specializes in higher-risk loans. In many cases, the financial giant refused to apply borrowers' payments to their loan principal, which led to inaccurate account statements and unfair fees. Further, borrowers were unable to obtain accurate information about their mortgage loans because of poor tracking and loan administration. The company was also accused of failing to provide relevant information about loan modifications to the people who would need them the most.

Even though the company has now paid its dues through a civil suit, administrators could still face criminal prosecution.

Victims of foreclosure are not necessarily irresponsible with their finances. In many cases, companies such as Ocwen defrauded their customers, causing them to lose their homes through unfair business practices. Borrowers who are still facing foreclosure in Maryland may be eligible to receive a portion of the national settlement; a consultation with a qualified bankruptcy attorney can help those people learn more.

Source: The Washington Post, "Maryland secures $88 million for distressed homeowners in Ocwen Financial settlement" Annys Shin, Dec. 19, 2013

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