If you have ever had a mortgage serviced by Ocwen Loan Servicing or PHH Mortgage, you may be entitled to compensation through a legal settlement. Many homeowners have recently discovered that they were charged unnecessary or unauthorized fees when making their monthly payments. These charges, often labeled as convenience fees or processing fees, became the subject of a significant class-action lawsuit. This guide will help you understand the details of the settlement, determine if you are eligible for a payment, and explain the steps you need to take to secure your funds.
Understanding the Ocwen Fee Settlement
The settlement stems from allegations that Ocwen Loan Servicing, LLC, and its successor, PHH Mortgage Corporation, violated consumer protection laws. The core of the issue involves “convenience fees” charged to borrowers who made mortgage payments over the phone or through the internet. Plaintiffs in the case argued that these fees were not authorized by the original mortgage agreements and were therefore illegal under various state and federal laws.
While the companies have denied any wrongdoing, they agreed to a multi-million dollar settlement to avoid the costs and risks of further litigation. This agreement provides a fund that is used to reimburse affected homeowners for a portion of the fees they paid. For many families, this represents an important opportunity to recover money that was unfairly taken during the course of their homeownership.
Who Is Eligible for Compensation?
Eligibility for the settlement generally depends on when your mortgage was serviced and whether you were charged specific types of fees. To qualify as a class member, you typically must meet several criteria related to your account history. Identifying your status is the first step in the process.
Generally, you are considered part of the settlement class if:
- You had a residential mortgage loan serviced by Ocwen or PHH Mortgage during the class period.
- You paid a fee to make a loan payment via telephone, the IVR (Interactive Voice Response) system, or the internet.
- Your loan was subject to specific state laws or terms within your mortgage contract that prohibited such fees.
- You have not already received a full refund for these specific charges.
It is important to note that the “class period”—the specific timeframe covered by the lawsuit—can vary depending on the state where your property is located. Most eligible borrowers received a notice in the mail or via email explaining their rights, but even if you did not receive a notice, you may still be eligible if your records show these payments.
How to Identify Convenience Fees on Your Statements
To determine if you were affected, you should review your past mortgage statements or payment history. These fees are often small, ranging from $5 to $20 per transaction, which makes them easy to overlook. However, over several years of monthly payments, these costs can add up to hundreds of dollars.
Look for line items on your statements labeled as “Speedpay,” “Web Pay Fee,” “Phone Pay Fee,” or simply “Convenience Fee.” If you see these charges recurring on your account history, you should document the dates and amounts. Having this information ready will make the claim process much smoother and ensure you are asking for the correct reimbursement amount.
Steps to File a Claim
The process for receiving a payment usually involves submitting a claim form to the court-appointed settlement administrator. This administrator is a third-party company responsible for verifying identities and distributing the funds. Following the instructions carefully is vital to ensure your claim is not rejected for technical reasons.
- Locate Your Notice ID: If you received a settlement notice, it will contain a unique ID number. This number links your claim to your mortgage account and speeds up the verification process.
- Complete the Claim Form: You can typically file your claim online through the official settlement website or by mailing a paper form. You will need to provide your contact information and confirm your status as a borrower on the affected account.
- Provide Documentation: In some cases, you may be asked to provide proof of the fees paid. This could include copies of bank statements or mortgage documents showing the convenience fee charges.
- Submit Before the Deadline: Every settlement has a strict deadline for filing claims. If you miss this date, you will lose your right to collect any money from the fund.
What Happens After You File?
Once your claim is submitted, the administrator will review it for accuracy. This process can take several months, as they must wait for the claim deadline to pass and for the court to grant final approval to the settlement. If your claim is approved, you will receive a check or an electronic payment for your share of the settlement fund.
How Much Money Can You Expect?
The amount of money each borrower receives is not a fixed number. Instead, it is calculated based on a few different factors. The goal of the settlement is to distribute the funds as fairly as possible among all eligible participants who file a valid claim.
Factors that influence your payment include:
- The total number of fees paid: Those who paid convenience fees every month for several years will generally receive more than those who only paid them once or twice.
- The total number of claimants: The settlement fund is a fixed amount. If a large number of people file claims, the individual payouts may be smaller.
- Administrative costs: Legal fees and the costs of managing the settlement are deducted from the total fund before payments are sent to borrowers.
- Pro-rata distribution: Most settlements use a pro-rata system, meaning you receive a percentage of the total fees you paid rather than a 100% refund.
Legal Rights and Options
When a class-action settlement is reached, you generally have three options. It is important to understand what each choice means for your legal rights. Most people choose to stay in the settlement to receive a payment, but there are other paths you can take depending on your situation.
Option 1: File a Claim
By filing a claim, you agree to the terms of the settlement. In exchange for a cash payment, you give up the right to sue Ocwen or PHH Mortgage individually for the same issues in the future. This is the most common path for homeowners looking for a quick and guaranteed resolution.
Option 2: Exclude Yourself (Opt-Out)
If you believe you have a significant individual legal claim and want to sue the company on your own, you must formally exclude yourself from the settlement. This is known as “opting out.” If you opt out, you will not receive any money from this settlement, but you retain your right to pursue your own legal action.
Option 3: Object to the Settlement
If you remain in the settlement but believe the terms are unfair—for example, if you think the attorneys are being paid too much or the borrower payouts are too low—you can file an objection with the court. The judge will consider these objections before deciding whether to give final approval to the deal.
Conclusion
The Ocwen mortgage fee settlement is a significant step toward holding large financial institutions accountable for the fees they charge consumers. For many homeowners, this settlement provides a simple way to recover money that was incorrectly charged over the life of their loan. By taking the time to review your eligibility and submit a claim, you can ensure that you receive the compensation you deserve.
If you believe you are eligible, do not wait to take action. Gather your records, find your loan information, and submit your claim as soon as possible. For more information on managing your finances and understanding your rights as a consumer, explore our other articles on mortgage management and legal settlements.