The settlement has been approved by a federal judge for the New Century mortgage Forced Placed Flood Coverage lawsuit. The case covers a period from May 2005 to March 2007. The settlement was agreed upon by investors, led by the New York State Teachers’ Retirement System pension fund. Those investors accused New Century of hiding their financial situation from their customers. The case was filed against the company because it failed to pay the flood insurance premiums and failed to provide mandatory flood insurance.
In this Ocwen vs. New Century Mortgage Forced Placed Flood Coverage lawsuit, the loan servicer failed to properly credit borrowers’ payments and billed them for add-on products without their knowledge. This omission, coupled with the lender’s failure to offer borrowers assistance in avoiding foreclosure, has caused countless borrowers to face significant hardships.
The CFPB filed its complaint in federal district court in the Southern District of Florida, seeking a court order that forces Ocwen to abide by mortgage servicing law and provide relief to borrowers. The lawsuit also seeks penalties and sanctions for the defendants. However, the CFPB’s complaint is not a final judgment that the defendants violated the law.
The plaintiffs contend that the loan modification agreement was not valid. GMAC’s denial of the loan modification agreement was due to improper processing of the application. Ocwen has argued that it did not receive the signed Modification Agreement from the plaintiffs. In addition, it argues that the loan modification was denied because the plaintiffs filed for bankruptcy and did not receive the approval of the bankruptcy court.
The plaintiffs argue that Ocwen violated RESPA, but Ocwen counters that the allegations do not fall within the scope of the statute. Further, Ocwen argues that the plaintiffs have not adequately alleged the factual evidence to support their allegations. This argument fails. The plaintiffs also contend that Ocwen acted unfairly in forcing the plaintiffs to buy flood coverage.
New Century mortgage
In a recent lawsuit, a former lender alleges that he was forced to purchase flood coverage for one of his loan products. Under the National Flood Insurance Program, lenders are required to review active food maps of their communities to determine if a home is located in a flood zone. Lenders also complete a Standard Flood Hazard Determination Form. The lender may require flood insurance for a property when it is part of the NFIP or when it sells its mortgage portfolio.