CIT Pays $29.9MM to Settle Mortgage Servicing Rights Case

According to an 8-K filing, Ocwen Loan Servicing filed a demand for arbitration against CIT alleging that CIT failed to meet its contractual obligations to indemnify Ocwen for losses allegedly suffered from servicing errors attributable to the period prior to the June 2013 sale of mortgage servicing rights to Ocwen and CIT’s ownership of the business.

On November 22, 2017, CIT and Ocwen agreed to a settlement of $29.9 million to resolve the claims. CIT said it is adequately reserved for the settlement and the settlement will not have a material effect on CIT’s financial condition or results of operations.

According to a filing with the SEC, the settlement with CIT Bank is for “certain allegations under a 2013 transaction pursuant to which Ocwen acquired certain mortgage servicing rights and related servicing advance receivables from OneWest.”

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