Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 1 of 70 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA

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1 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 1 of 70 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA JOHN ROBERT BEGLEY and ) CARRIE BELL BEGLEY, on behalf ) of themselves and all others similarly ) situated, ) ) Plaintiffs, ) CASE NO. 3:16-cv MCR-CJK ) v. ) ) OCWEN LOAN SERVICING, LLC, ) ) Defendant. ) STIPULATION OF SETTLEMENT AND RELEASE Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 1

2 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 2 of 70 TABLE OF EXHIBITS Exhibit A: Active/Transfer Class Notice Exhibit B: Claim Form Exhibit C: Operative Complaint Exhibit D: Paid-Off Class Notice Exhibit E: [Proposed] Preliminary Approval Order Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 2

3 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 3 of 70 IT IS HEREBY STIPULATED AND AGREED, by and between Plaintiffs John Robert and Carrie Bell Begley (the Begleys ) and Defendant Ocwen Loan Servicing, LLC ( Ocwen ), with all terms as defined below, each through their duly authorized counsel, that the above-captioned action, John Robert Begley and Carrie Bell Begley, et al. v. Ocwen Loan Servicing, LLC, No. 3:16-cv MCR-CJK (N.D. Fla.), is hereby settled on all of the terms and conditions set forth in this Stipulation of Settlement and Release, and that upon approval by the Court, judgment shall be entered on the terms and conditions set forth herein. 1. INTRODUCTION 1.1 On April 6, 2016, the Begleys filed a putative class action lawsuit in the United States District Court for the Northern District of Florida, Pensacola Division, captioned John Robert Begley and Carrie Bell Begley, et al. v. Ocwen Loan Servicing, LLC, No. 3:16-cv MCR-CJK (the Action ). Their complaint asserted claims for damages and injunctive relief against Ocwen, a loan servicer, for allegedly failing to properly credit home loan payments made by borrowers under optional weekly and biweekly accelerated loan payoff plans. (Doc. 1). The Begleys pleaded claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, negligence, and violation of the Florida Deceptive and Unfair Trade Practices Act, FLA. STAT , et seq. (Id.). 1.2 On June 13, 2016, Ocwen moved to dismiss the Begleys complaint. (Doc. 9). 1.3 The Begleys then amended their complaint on June 29, 2016, and that complaint serves as the operative complaint in this Action (the Operative Complaint ). (Doc. 18). 1 The Operative Complaint pleads claims for breach of contract, breach of the implied duty of good 1 The Operative Complaint added third-party Primary Residential Mortgage, Inc., the Begley s original lender, as an additional defendant. (Doc. 18 passim). Shortly thereafter, however, the Begleys voluntarily dismissed their claims against Primary Residential Mortgage, Inc. on August 8, (Doc. 28). Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 3

4 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 4 of 70 faith and fair dealing, unjust enrichment, negligence, violation of the Florida Deceptive and Unfair Trade Practices Act, and conversion. (Id.) Ocwen moved to dismiss the Operative Complaint on July 18, (Doc. 23). 1.5 In August 2016, during briefing with respect to Ocwen s motion to dismiss, the Parties met on multiple occasions to develop a Rule 26 discovery plan. (Doc. 29). As part of that Rule 26 planning conference and pursuant to the Court s ADR requirements (see, e.g., UADC N.D. Fla. L.R. 16.3, Doc. 12 at (2)(a)(iii)), the Parties sought a stay of the Action in order to allow them to attempt to resolve this matter through private mediation, with the Parties exchanging information that they deemed necessary to prepare for mediation and effectively negotiate their respective positions. (Doc. 29). That stay was granted by the Court on August 26, 2016 (Doc. 30), and as mediation progressed and continued, the stay was extended by the Court on October 5, 2016 (Doc. 32), November 22, 2016 (Doc. 35), January 20, 2017 (Doc. 37), and February 6, 2017 (Doc. 39). 1.6 Ultimately, the Parties engaged in a protracted five month mediation under USDC N.D. Fla. L.R to reach an amicable resolution of the claims and defenses at issue in this case. Those efforts included three separate mediation sessions held on September 26, 2016, November 15, 2016, and January 10-11, 2017 all of which were overseen by former U.S. Attorney and retired United States District Judge Thomas E. Scott, accompanied by continuing exchanges by the Parties of informal discovery and confirmatory due diligence information and data. Class Counsel also consulted with their independent experts throughout the course of mediation. (Docs. 31-1, 34-1, 36-1). 1.7 Through their arms -length negotiations, the Parties were able to reach an agreement in principle on the key terms of relief to the Settlement Class on January 11, Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 4

5 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 5 of 70 Negotiations over Attorneys Fees and Expenses and a Service Award then ensued. As a result of the ongoing mediation and those subsequent fee-related negotiations, and based upon their own independent investigations and evaluations of the facts and law relating to all of the matters alleged in the pleadings, the Parties reached a full agreement in principle regarding the basic framework for this Settlement on February 3, (Doc. 38). Thereafter, the Parties engaged in further negotiation of all details of this Settlement, along with further information and due diligence exchanges. (Doc.41). 1.8 As a result of the Parties respective investigations, and their informal discovery and due diligence efforts, and with capitalized terms having the meanings ascribed to them in Section 2 of this Agreement, the Parties hereby stipulate and agree, solely for purposes of this Settlement, that: a. Servicing rights to the Begleys home mortgage loan were acquired by GMAC Mortgage Corporation ( GMACM ) in (Doc. 18, 26). b. In 2012, the Begleys received a solicitation from GMACM to enroll in an optional and elective accelerated payoff plan administered by third-party ACI Worldwide, Inc. ( ACI ), under which partial mortgage payments are withdrawn from your bank account once a week, every two weeks, or twice a month. Full monthly mortgage payments are applied to your loan once a month. Over a 12-month period, you make the equivalent of 13 monthly mortgage payments, thus helping to reduce your loan balance more quickly than scheduled. (Doc at 2; see also Doc. 18, 28-29). The ACI Extra Payments made by a borrower over the course of a calendar year under an ACI weekly payment plan or ACI weekly payment plan over and above the contractual monthly amounts due are applied to reduce the principal balance of that ACI Loan, having a compounding interest savings effect that reduce[s] the time it takes to pay off Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 5

6 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 6 of 70 your mortgage, resulting in interest savings over the life of the loan. (Doc at 1). For an ACI bi-weekly plan a third (3rd) bi-weekly payment within the same calendar month occurs twice a year, and under an ACI weekly plan a fifth (5th) weekly payment occurs within the same calendar month four times a year. These are referred to herein as ACI Extra Payments. If all payments are made as and when contemplated, and there are no intervening unpaid fees, delinquencies, insurance charges, or escrow shortages (hereinafter a Program Compliant ACI Loan ), then the ACI Loan will at all times be paid at least 30 days ahead, enabling these ACI Extra Payments to be applied as principal reductions, immediately reducing the outstanding principal balance of the loan. Under these conditions, for Program-Compliant ACI Loans, the ACI weekly and bi-weekly payment programs contemplated that these ACI Extra Payments (as more fully defined in Section 2) would in fact immediately be applied to reduce the outstanding principal balance of the ACI Loan. c. In response to the GMACM solicitation, the Begleys enrolled in the ACI bi-weekly payment plan option, and began making payments under that plan in October The Begleys later requested and received an amortization schedule from GMACM showing how their payments would be credited assuming all payments were made as and when planned. Thereafter, the Begleys timely made all payments required under their ACI bi-weekly payment plan. d. Shortly thereafter, GMACM and its parent company, Residential Capital, LLC, declared bankruptcy. Through a court-approved sale that was part of that bankruptcy, Ocwen acquired the servicing rights to a portfolio of mortgages formerly serviced by GMACM, which included the Begleys loan (the GMACM Loans ). (See Order Under 11 U.S.C. 105, 363, and 365 and Fed Bankr. P. 2002, 6004, 6006, And 9014 (I) Approving (A) Sale Of Debtors Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 6

7 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 7 of 70 Assets Pursuant To Asset Purchase Agreement With Ocwen Loan Servicing, LLC; (B) Sale Of Purchased Assets Free And Clear Of Liens, Claims, Encumbrances, And Other Interests; (C) Assumption And Assignment Of Certain Executory Contracts And Unexpired Leases Thereto; (D) Related Agreements; And (II) Granting Related Relief at 6, 11, In re: Residential Capital, LLC, et al., No (MG), Doc (Bankr. S.D.N.Y Nov. 21, 2012)). That transaction closed on February 13, e. Initially, Ocwen continued to service all of the GMACM Loans on the legacy GMACM loan servicing platform, which properly applied all payments made under ACI weekly and ACI bi-weekly payment plans. Beginning in July 2013, Ocwen began migrating the GMACM Loans to REALServicing, a proprietary residential loan servicing software system developed and maintained by a third party and provided for use by Ocwen pursuant to the terms of a written servicing agreement. REALServicing helps manage a variety of Ocwen s residential mortgage loan servicing activities, including loan amortization and billing, and application and tracking of borrower payments. f. Ocwen s records reflect that 34,736 of the GMACM Loans that migrated to REALServicing were enrolled on an ACI weekly or ACI bi-weekly payment plan for some period of time on or after February 13, 2013 (the ACI Loans ). The Begleys contend, based on investigation and due diligence, that after each ACI Loan was transferred to REALServicing (which occurred in batches from July 2013 through October 2014)), ACI Extra Payments made under ACI weekly and bi-weekly payment plans began to be misapplied. Specifically, for a Program-Compliant GMACM Loan enrolled under an ACI weekly and bi-weekly payment plan, in months when an ACI Extra Payment was made by a borrower (which happens twice a year for a loan on an ACI bi-weekly plan and four times a year for a loan on an ACI weekly plan) the Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 7

8 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 8 of 70 Begleys contend that REALServicing applied the ACI Extra Payments to a suspense account until enough money was in suspense to make a full future monthly loan payment on the loan, instead of applying each of the ACI Extra Payments to immediately reduce the principal balance of the loan at the time such ACI Extra Payments were made. Because the immediate application of ACI Extra Payments to reduce principal is what was contemplated by the ACI weekly and ACI bi-weekly payment plans, the Begleys contend this was an error. If an ACI Extra Payment was applied instead to suspense and then to pay a future regular monthly payment, a borrower on a Program-Compliant ACI Loan who made all payments as and when due over a full calendar year under an ACI weekly or ACI bi-weekly payment plan would still make the equivalent of 13 months worth of payments over a 12 month period of time, as contemplated by the ACI weekly and ACI bi-weekly payment plans. However, instead of having his or her principal balance immediately reduced with each ACI Extra Payment as contemplated by the ACI weekly and ACI bi-weekly programs, that borrower s ACI Loan would instead be held in suspense until there was enough in suspense to pay a full contractual monthly payment, at which time the accumulated ACI Extra Payments would be used to pay the loan 1 additional month ahead, with the borrower s next payment then being due 60 or more days into the future (the Extra Payment Processing Issue, as more fully defined in Section 2). This would be reflected on the borrower s monthly statement. If left uncorrected or unchanged, and assuming the borrower under a Program-Compliant ACI Loan made payments as and when contemplated under his or her ACI weekly or ACI bi-weekly payment plan, the result would be that a borrower paying under an ACI weekly or ACI bi-weekly payment plan would pay more interest over the life of the loan than that ACI plan contemplated, and would not pay off his or her loan as early as that ACI plan contemplated. The Begleys notified Ocwen in writing of the Extra Payment Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 8

9 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 9 of 70 Processing Issue with respect to their loan in the fall of 2015, prior to the filing of the Action on April 6, g. Ocwen asserts that ACI weekly and bi-weekly payment plans were made available only to borrowers whose loans were previously serviced by GMACM. Ocwen further asserts that the legacy ACI plans were therefore offered only to borrowers having GMACM Loans, and were not offered by Ocwen to other borrowers. h. Due to individual real-world variations in duration of time on the ACI weekly or ACI bi-weekly payment programs, a borrower s actual payment history, incorrect payment amounts sent by the borrower, interest rates variations from loan to loan, interest rate changes on a given loan and the borrower s response or lack of response thereto in adjusting his or her ACI weekly or bi-weekly payment amounts, insufficient funds transactions, events resulting in fees charged to the ACI Loan, escrow changes or deficiencies, property tax changes or deficiencies, and a host of other variables, not all ACI Loans and not all ACI Extra Payments would necessarily have been impacted consistently or to the same extent by the Extra Payment Processing Issue. Where the Extra Payment Processing Issue did impact the application of an ACI Extra Payment, the effect would be to prevent that ACI Extra Payment from being immediately applied to reduce the principal balance of a borrower s ACI Loan at the time that ACI Extra Payment was made, potentially resulting in a higher unpaid principal balance going forward than would have been the case with timely application of that ACI Extra Payment to reduce principal, but over time also resulting in the next payment due being at a later date than would have been the case had the ACI Extra Payment been immediately applied to reduce principal. Unless manually corrected thereafter, any such payment misapplication also resulted in extra interest being charged on the ACI Loan, which compounded over time resulting in an Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 9

10 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 10 of 70 additional loss for each affected Settlement Class Member. Unless manually corrected or adjusted, any payment misapplication would never have resulted in a borrower paying less interest or having a lower principal balance due on their mortgage. i. Whether any adverse impact to a borrower occurred for a given ACI Extra Payment and, if so, the extent of that adverse impact, would depend on a variety of factors, including whether the borrower was in a prepaid status as contemplated by the ACI weekly and bi-weekly payment plans at the time each ACI Extra Payment was made, and otherwise compliant with all terms of his or her ACI Loan, including escrow, property taxes and insurance obligations. Further, even though some ACI Extra Payments were initially misapplied by REALServicing, they may have been manually reversed and reapplied by Ocwen personnel over time for a number of reasons, including, for example, in response to borrower inquiries or complaints or in response to loan audits, reviews or other manual servicing activity by Ocwen. j. Due to the number of variables involved in determining the existence and extent of any adverse impact from the Extra Payment Processing Issue on any ACI Loan, the Parties agree that the only method of correcting any past ACI Extra Payment misapplications is through manual loan-by-loan reversal of ACI Extra Payments made to Ocwen on each ACI Loan while that loan was being serviced on REALServicing, and manual reapplication of those ACI Extra Payments in accordance with the application protocol contemplated by the applicable ACI weekly payment or ACI bi-weekly payment plans. For ACI Loans not previously paid-off, any correction of past ACI Extra Payment misapplications will generally produce both a lower unpaid principal balance and a next payment due date due sooner than currently reported. For all these reasons, the Parties agree that the claim-in and acceptance procedures set forth in this Agreement are necessary and appropriate prerequisites to corrective Account Adjustments for Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 10

11 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 11 of 70 ACI Loans that have not been paid-off as of the Class Roster Date. k. As of the Class Roster Date, Ocwen s records indicate that 8,800 of the 34,736 ACI Loans have an Active Status (that is, are still active loans being serviced by Ocwen), 9,011 have a Paid-Off Status (that is, were paid off, often as a result of re-financing, closed or written off while being serviced by Ocwen), and 16,925 have a Transferred Status (that is, were previously transferred from Ocwen to another loan servicer for future servicing of the loan). l. The ACI programs were by their terms terminable by the servicer at will. After the filing of this Action, in an effort to eliminate the possibility of any future payment misapplications of the type alleged, Ocwen terminated all ACI programs (including the ACI weekly and ACI bi-weekly accelerated payoff programs on the ACI Loans), effective February 1, The Begleys and other borrowers were notified of the termination of all ACI programs and were simultaneously offered the opportunity to enroll in similar accelerated payoff programs offered by Ocwen that are compatible with REALServicing and not subject to the Extra Payment Processing Issue. 1.9 This Agreement is a compromise of disputed claims, and the Agreement, any related documents, and any negotiations resulting in it shall not be construed as or deemed to be evidence of or an admission or concession of liability or wrongdoing on the part of Ocwen, or any of the Released Parties (as defined in this Agreement), with respect to any claim of any fault or liability or wrongdoing or damage whatsoever The Begleys believe that the claims asserted in the Action against Ocwen have merit and that they would ultimately have been successful in adversarial certification of the proposed class under Federal Rule of Civil Procedure 23 and in prevailing on the merits at summary judgment, trial or appeal, given what they believe to be the systematic and significant Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 11

12 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 12 of 70 impact of Ocwen s misapplication of the Settlement Class Members ACI Extra Payments. Nevertheless, the Begleys and Class Counsel recognize and acknowledge that Ocwen has raised and could raise factual and legal defenses in the Action that present a risk that the Begleys may not prevail on class certification for purposes of litigation or on the merits. The Begleys and Class Counsel also recognize the expense and delay associated with continued prosecution of the Action against Ocwen through class certification, trial, and any subsequent appeals. The Begleys and Class Counsel also have taken into account the uncertain outcome and risks of any litigation, especially in complex actions, as well as the difficulties inherent in such litigation. Further, the Settlement as contemplated offers a 100% accounting remedy to Settlement Class Members. Therefore, the Begleys believe that it is desirable that the Released Claims (as defined in this Agreement) be fully and finally compromised, settled, and resolved with prejudice, and barred pursuant to the terms set forth in this Agreement Based on their examination and evaluation of the relevant law and facts to assess the merits of the claims and potential claims of the putative class, Class Counsel have concluded that the terms and conditions of this Agreement are fair, reasonable, and adequate to the Settlement Class, and that it is in the best interest of the Settlement Class to settle the claims raised in the Action pursuant to the terms and provisions of this Agreement At all times, Ocwen has denied and continues to deny liability for the claims asserted in the Action and denies that it committed, threatened, attempted or intended to commit any wrongful act or violation of law or duty alleged in the Action. Ocwen maintains that no class would be properly certifiable for purposes of litigation (due to, among other things, manageability concerns that are not relevant to the certification of a settlement class); that any errors in crediting ACI Extra Payments were unintentional and are subject to a good faith, bona Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 12

13 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 13 of 70 fide error defense; that the Begleys ACI bi-weekly payment plan was not a contractual obligation of Ocwen or a modification of the terms of their ACI Loan; and that the terms of many of the promissory notes of persons in the Settlement Class (including the Begleys note) required borrowers wishing to make a partial prepayment of principal to so indicate in writing to Ocwen, which many of the borrowers within the Settlement Class did not do at the time ACI Extra Payments were made by them; that Settlement Class Members have ratified payment applications made on their ACI Loans and waived any objections to those payment applications; and that Ocwen has other meritorious defenses to the claims alleged in the Action and was prepared to vigorously defend all aspects of the Action. Nevertheless, taking into account the uncertainty, costs and risks inherent in any litigation, Ocwen has concluded that further defense of the Action would be unduly protracted, costly, burdensome and disruptive to its business operations, and that it is desirable and beneficial that the Action be fully and finally settled and terminated in the manner and upon the terms and conditions set forth in this Agreement The Begleys assert they provided written notice to Ocwen of the Extra Payment Processing Issue in the fall of 2015, and also assert that Ocwen either intentionally or negligently failed to identify and correct the Extra Payment Processing Issue, resulting in continuing and compounding losses for the Settlement Class. The Begleys deny there is any requirement that they or any other Settlement Class Member notify Ocwen of their request that any ACI Extra Payment be immediately applied to principal reduction. The Begleys further assert that this Action caused Ocwen to decide to terminate all ACI programs (including the ACI weekly and ACI bi-weekly accelerated payoff programs on the ACI Loans) effective February 1, 2017, thereby terminating losses to the Settlement Class that would have continued and compounded for years. Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 13

14 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 14 of Given all of the above, and considering the risks and uncertainties inherent in continued litigation and all factors bearing on the merits of settlement, the Parties are satisfied that the terms and conditions of this Agreement and Settlement are fair, reasonable, adequate and in their respective best interests, and the Parties have therefore executed this Stipulation of Settlement and Release. 2. DEFINITIONS 2.1 As used in this Agreement and the attached exhibits (which are integral parts of this Agreement and are incorporated in their entirety by reference), the following terms have the following meanings, unless this Agreement specifically provides otherwise: Acceptance Form means the form that will be attached to the Determination Notice that a Claimant must sign and return to the Settlement Administrator in order to accept and ratify any Account Adjustments determined to be due through the Claims Process with respect to ACI Loans listed by a Claimant on his or her Claim Form Account Adjustment means the relief to which a Settlement Class Member may be entitled under this Settlement, as set forth in Section 4 of this Agreement ACI means ACI Worldwide, Inc ACI Extra Payment means a third ACI bi-weekly payment, or fifth ACI weekly payment, made by a borrower on a given Program-Compliant ACI Loan in a single calendar month, and which was supposed to be applied as and when made to reduce the principal balance of the ACI Loan. Under an ACI bi-weekly plan, a borrower under a Program-Compliant ACI Loan would make a total of two ACI Extra Payments over the course of a calendar year, each constituting one half (1/2) of the contractual monthly mortgage payment amount, in effect adding up to the equivalent of a 13th full monthly payment made over the course of the year. Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 14

15 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 15 of 70 Under an ACI weekly plan, a borrower would make a total of four ACI Extra Payments over the course of a calendar year, each constituting one quarter (1/4) of the contractual monthly mortgage payment amount, in effect adding up to the equivalent of a 13th full monthly payment made over the course of the year ACI Loans means the 34,736 GMACM Loans that Ocwen s records reflect were enrolled on an ACI weekly or ACI bi-weekly accelerated payoff plan for some period of time on or after February 13, 2013, and while those loans were being serviced by Ocwen on REALServicing Action means the lawsuit captioned John Robert Begley and Carrie Bell Begley, et al. v. Ocwen Loan Servicing, LLC, case number 3:16-cv MCR-CJK, pending in the United States District Court for the Northern District of Florida, Pensacola Division Active Status means that, according to Ocwen s records, an ACI Loan was being actively serviced by Ocwen as of the Class Roster Date Active/Transfer Class Notice means the legal notice summarizing the terms of this Agreement, in a form substantially similar to that attached as Exhibit A, to be provided pursuant to the provisions of Section 5 of this Agreement to Settlement Class Members having ACI Loans with an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date Agreement means this Stipulation of Settlement and Release and the exhibits attached hereto or incorporated herein, including any subsequent amendments agreed to by the Parties pursuant to the provisions of Section 11 of this Agreement and any exhibits to such amendments, which together are the settlement (the Settlement ) Attorneys Fees and Expenses means such aggregate funds as may be Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 15

16 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 16 of 70 awarded by the Court to compensate Class Counsel (and any other past, present or future attorneys for the Begleys or the Settlement Class in this Action) for all of the past, present and future attorneys fees, costs (including court costs), expenses and disbursements earned or incurred collectively and individually by any and all of them, their investigators, experts, staff and consultants combined in connection with the Action Audit and Remediation Protocol means the process for auditing an ACI Loan s payment history, under which (a) the ACI Loan s actual prior payment and servicing history while it was serviced by Ocwen on the REALServicing platform are copied from the historical data records of REALServicing to a separate test environment; (b) all prior payments made to Ocwen (including ACI Extra Payments) while the ACI Loan was being serviced on REALServicing are reversed back to the date the ACI Loan first began to be serviced on the REALServicing platform; (c) those payments are then manually reapplied (effective as of the original payment dates and payment amounts shown in the REALServicing prior payment history), with any ACI Extra Payments made on a Program-Compliant ACI Loan being applied as and when they were actually made towards the reduction of that ACI Loan s principal balance. In reapplying payments other than ACI Extra Payments to any ACI Loan, and in applying any payment (including ACI Extra Payments) to ACI Loans that were not Program- Compliant, such payments shall be applied in accordance with the priorities, terms and conditions set forth in the note, mortgage and other loan documents, and shall be applied as of the date those payments were actually made The Begleys means John Robert Begley and Carrie Bell Begley, the named plaintiffs in the Action Claim means a claim for an Account Adjustment submitted by a Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 16

17 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 17 of 70 Claimant using a Claim Form, as provided for in Section 4 of this Agreement Claimant means a Settlement Class Member having an ACI Loan with an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date, who has submitted a Claim Claim Form means the document, substantially in the form attached as Exhibit B, that Settlement Class Members having ACI Loans with an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date must timely submit to the Settlement Administrator by the Claim Form Deadline in order to seek Account Adjustments. Settlement Class Members who opt out of this Settlement and the Settlement Class may not submit a Claim Form Claim Form Deadline means the date by which Claim Forms must be received by the Settlement Administrator. The Claim Form Deadline shall be disclosed in the Active/Transfer Class Notice and on the Settlement Website, and shall be designated as sixty (60) days after the originally scheduled date of the Fairness Hearing, or on such other date as may be ordered by the Court Claims Process means the process for submitting Claims for Account Adjustments with respect to ACI Loans having an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date, as described in Section 4 of this Agreement Class Counsel means: (a) Bryan F. Aylstock, of the law firm of Aylstock, Witkin, Kries & Overholtz, PLLC, 17 E. Main Street, Suite 200, Pensacola, Florida 32502; (b) Richard M. Golomb and Kenneth J. Grunfeld, of the law firm of Golomb & Honik, PC, 1515 Market Street, Suite 1100, Philadelphia, Pennsylvania 19102; (c) Joseph H. Aughtman, of the Aughtman Law Firm, LLC, 1722 Platt Place, Montgomery, Alabama 36117; and (d) Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 17

18 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 18 of 70 Aaron C. Hemmings, of the law firm of Hemmings & Stevens, PLLC, 5540 McNeely Drive, Suite 202, Raleigh, North Carolina Class Roster Date means April 26, 2017, the date upon which the loan status of each of the ACI Loans encompassed within the Settlement Class was verified by reference to Ocwen s records for purposes of this Settlement and Agreement Costs of Administration means the reasonable and necessary costs Ocwen has agreed to pay to: (a) provide notice of the Settlement and this Agreement to the Settlement Class, as set forth in Section 5 of this Agreement, with such costs being limited to those associated with distributing notices to appropriate state and federal officials as required by 28 U.S.C. 1715; to establish and maintain the Settlement Website; and to print, mail and otherwise distribute the Paid-Off Class Notices and Active/Transfer Class Notices to the Settlement Class as provided in Section 5; (b) to process Claims, objections and requests for exclusion; (c) to audit the account histories of all ACI Loans with a Paid-Off Status in Ocwen s records as of the Class Roster Date, and the account histories of Claimants who timely submit valid Claim Forms with ACI Loans with an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date, to assess whether any Account Adjustments are due pursuant to the Audit and Remediation Protocol, and to administer distribution of Account Adjustments, and as set forth in Section 4 of this Agreement; and (d) pay the reasonable fees and expenses that may be incurred by the Neutral in resolving any notices of appeal filed by Claimants to challenge Account Adjustment determinations, as set forth in Section 4 of this Agreement. The Costs of Administration include the reasonable fees and expenses incurred by the Settlement Administrator in performing all of the tasks for which the Settlement Administrator is retained, and do not include any Attorneys Fees and Expenses or Service Awards that may be approved Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 18

19 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 19 of 70 by the Court Court means the United States District Court for the Northern District of Florida, Pensacola Division, the Honorable Margaret Catharine Rogers presiding, or any other judge of this court who shall succeed her as the Judge assigned to this Action Determination Notice means the written notice, in a form to be agreed to by the Parties and approved by the Court, that will be provided by the Settlement Administrator to a Claimant upon the completion of the processing of his or her Claim Form under the Audit and Remediation Protocol, which shall inform the Claimant of any Account Adjustment determined to be due on each ACI Loan listed in his or her Claim Form, and which shall include the Acceptance Form and instructions on how a Claimant may file a notice of appeal to challenge the Account Adjustment determinations Extra Payment Processing Issue means any application by Ocwen s REALServicing system of an ACI Extra Payment made by a borrower on a Program-Compliant ACI Loan to suspense or to pay a future contractual monthly payment instead of being applied in full to principal reduction. Any such misapplication of ACI Extra Payments on Program- Compliant ACI Loans would tend to result in the borrower s next payment due being further into the future than the applicable ACI weekly or bi-weekly payment plan contemplated, but would also tend to result in the borrower paying more interest over the life of the loan than contemplated by the applicable ACI weekly or bi-weekly payment plan. ACI Extra Payments made by a borrower while his or her ACI Loan was not a Program-Compliant ACI Loan could properly be applied to fees and charges depending upon the individual circumstances, and therefore were not necessarily due to be applied fully to principal reduction under the terms of the ACI weekly and bi-weekly payment plans. Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 19

20 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 20 of Fairness Hearing means the hearing held by the Court to consider evidence and argument for the purposes of determining, among other things, whether this Agreement and the Settlement are fair, reasonable and adequate; this Agreement should be given final approval through entry by the Court of the Final Order and Judgment; and certification of the Settlement Class should be made final. The Fairness Hearing shall be held no earlier than one hundred and fifty (150) days after the date of entry of the Preliminary Approval Order Final Order and Judgment means the order entered by the Court approving the Settlement and this Agreement; certifying the Settlement Class pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure; and granting judgment pursuant to Rule 58 of the Federal Rules of Civil Procedure, which shall be in substantially the same form as is agreed to by the Parties and submitted to the Court at least ten (10) days before the Fairness Hearing Final Settlement Date means ten (10) days after the date on which the Final Order and Judgment approving this Agreement becomes final. For purposes of this Agreement, the Final Order and Judgment shall become final: (a) if no appeal is taken from the Final Order and Judgment, on the date on which the time to appeal therefrom has expired pursuant to Federal Rule of Appellate Procedure 4; or (b) if any appeal is taken from the Final Order and Judgment, on the date on which all appeals therefrom, including but not limited to petitions for rehearing or reargument pursuant to Federal Rule of Appellate Procedure 40, petitions for rehearing en banc pursuant to Federal Rule of Civil Procedure 35 and petitions for certiorari pursuant to Rule 13 of the Supreme Court or any other form of appellate review, have been fully and finally disposed of in a manner that affirms all of the material provisions of the Final Order and Judgment GMACM means GMAC Mortgage Corporation. Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 20

21 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 21 of GMACM Loans means the portfolio of loans previously serviced by GMACM, to which Owen acquired servicing rights through a court-approved sale as part of the In re: Residential Capital bankruptcy proceeding Neutral means Phillip E. Adams, Jr. of the National Academy of Distinguished Neutrals, who shall resolve any disputes by Claimants over whether Claims were properly approved, denied or rejected, or whether Account Adjustments were properly calculated pursuant to the Audit and Remediation Protocol Objection/Exclusion Deadline means the date by which written objection to this Agreement must be filed with the Court or a request for exclusion by a Settlement Class Member must be received by the Settlement Administrator, which shall be designated as a date thirty-five (35) days before the originally scheduled date of the Fairness Hearing (if the Fairness Hearing is continued, the deadline runs from the first scheduled Fairness Hearing), or on such other date as may be ordered by the Court Ocwen means Ocwen Loan Servicing, LLC Ocwen s Counsel means Michael R. Pennington, Robert J. Campbell, Michael B. Colgan and Brian Wahl of the law firm of Bradley Arant Boult Cummings LLP Operative Complaint means the First Amended Class Action Complaint, filed in the Action on June 29, 2016 (Doc. 18), and annexed hereto as Exhibit C Parties or Party means the Begleys and Ocwen, separately and collectively, as each of those terms is defined in this Agreement Paid-Off Class Notice means the legal notice summarizing the terms of this Agreement, in a form substantially similar to that attached as Exhibit D, to be provided pursuant to the provisions of Section 5 of this Agreement to Settlement Class Members having Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 21

22 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 22 of 70 ACI Loans with a Paid-Off Status in Ocwen s records as of the Class Roster Date Paid-Off Status means that, according to Ocwen s records, an ACI Loan was paid off, terminated and cancelled, closed, or otherwise no longer subject to any further payments on or before the Class Roster Date Preliminary Approval Order means the order to be entered by the Court preliminarily approving the Settlement as outlined in this Agreement, certifying the Settlement Class for settlement purposes only, designating Class Counsel as counsel for the Settlement Class and the Begleys as the representatives of the Settlement Class, and approving the form and content of the Paid-Off Class Notice and Active/Transfer Class Notice to be disseminated to the Settlement Class, a proposed version of which is attached hereto as Exhibit E Program-Complaint ACI Loan means an ACI Loan on which all payments are made as and when contemplated by the applicable ACI weekly or bi-weekly payment plan, with no intervening unpaid fees, delinquencies, insurance charges, or escrow shortages. In addition to consistent and timely weekly or bi-weekly payments, these ACI plans contemplated that at the beginning of the ACI weekly and bi-weekly plan, a full monthly contractual payment would be made at the same time as the first ACI weekly or biweekly payment, and that the loan would thereafter remain prepaid by at least 30 days at all times. This was necessary to avoid late fees that might otherwise occur under the terms of the borrower s note, mortgage and other loan documents if only part of the contractual monthly payment were received before the loan s late fee grace deadline Release means the release and waiver set forth in Section 8 of this Agreement Released Claims means each and all of the claims and potential claims Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 22

23 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 23 of 70 described in the Release Released Parties means Ocwen and any and all of its current or former predecessors, successors, assigns, parent corporations, subsidiaries, divisions, related and affiliated companies and entities, associates, vendors, service providers, software licensors and licensees, clients and customers, principals, stockholders, directors, officers, partners, principals, members, employees, attorneys, consultants, independent contractors, representatives and agents, transferee servicers, and all individuals or entities acting by, through, under or in concert with any of them Service Award means such funds as may be awarded by the Court to the Begleys to compensate them for their efforts in bringing the Action and achieving the benefits of this Agreement on behalf of the Settlement Class Settlement Administrator means Class-settlement.com, selected by the Parties to help implement the distribution of the Paid-Off Class Notice and Active/Transfer Class Notice, host the Settlement Website, and aid in fulfilling the Claims Process and other related requirements set forth in this Agreement. Class Counsel will seek the Court s approval of Classsettlement.com as the Settlement Administrator in connection with the preliminary approval of this Agreement and Settlement Settlement Class means, for purposes of the Settlement and this Agreement only, all persons who were borrowers on home mortgage loans on which any payments were made to Ocwen under a weekly or biweekly accelerated payoff program administered by ACI while those loans were being serviced by Ocwen on the REALServicing loan servicing platform. Excluded from the Settlement Class are: (a) Ocwen s board members and executive level officers; (b) persons who timely and properly exclude themselves from the Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 23

24 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 24 of 70 Settlement Class as provided in this Agreement; (c) persons who, as of the date of entry of the Preliminary Approval Order, are in active bankruptcy proceedings; and (d) all federal judges, their spouses, and persons within the third degree of relationship to them Settlement Class Member means a person who falls within the definition of the Settlement Class Settlement Website means the internet website that the Settlement Administrator will establish pursuant to the provisions of Section 5 following entry of a Preliminary Approval Order Transferred Status means that, according to Ocwen s records, an ACI Loan was transferred from Ocwen to another loan servicer for servicing on or before the Class Roster Date. 2.2 Other capitalized terms used in this Agreement but not defined in this Section 2 shall have the meanings ascribed to them elsewhere in this Agreement and the exhibits attached hereto. 2.3 The terms he or she and his or her include it or its where applicable. 3. CERTIFICATION OF THE SETTLEMENT CLASS 3.1 The Begleys and Class Counsel shall propose, without objection from Ocwen, that the Court: (1) certify the Settlement Class for settlement purposes only under Rule 23(b)(3) of the Federal Rules of Civil Procedure; (2) appoint the Begleys as the representatives for the Settlement Class; and (3) appoint Class Counsel as legal counsel for the Settlement Class. 3.2 Ocwen, without admitting that the Action meets the prerequisites for certification of a contested litigation class under Federal Rule of Civil Procedure 23 or for class certification for any purpose other than settlement, hereby agrees, on each and all of the terms and conditions Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 24

25 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 25 of 70 set forth herein, and solely for purposes and in consideration of the Settlement set forth herein, not to oppose the certification of the Settlement Class for settlement purposes only, the appointment of Class Counsel as legal counsel for the Settlement Class, or the approval of the Begleys as the representatives of the Settlement Class. 3.3 The Court s certification of the Settlement Class for settlement purposes only shall not be deemed to be an adjudication of any controverted fact or issue for any purpose other than the accomplishment of the provisions of this Settlement and this Agreement, and shall not be considered as law of the case, res judicata, judicial estoppel, promissory estoppel, or collateral estoppel in the Action or in any other proceeding unless and until the Final Settlement Date is reached. Whether or not the Settlement reaches the Final Settlement Date, the Parties stipulations and agreements as to class certification for settlement purposes only (and any and all statements or submission made by the Parties in connection with seeking the Court s approval of the Settlement and this Agreement) shall not be deemed to be any stipulation or grounds for estoppel or preclusion as to the propriety of class certification, nor any admission of fact or law regarding any request for class certification, in any other action or proceeding, whether or not involving the same or similar claims. In the event the Settlement and this Agreement are not approved, or the Final Settlement Date is not reached, or this Agreement is terminated, cancelled, or fails to become effective for any reason whatsoever, the Parties stipulations and agreements as to certification of the Settlement Class shall be null and void and the Court s certification order shall be vacated, and thereafter no class or classes will remain certified, and nothing in this Agreement or other papers or proceedings related to the Settlement shall be used as evidence or argument by any party concerning whether the Action may properly be maintained as a class action under applicable law; provided, however, that the Begleys and Class Counsel may Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 25

26 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 26 of 70 thereafter seek certification of a litigation class or classes before the Court without reference to this Settlement or anything filed in support of it, and Ocwen may oppose such certification on any available grounds. In the event the Settlement and this Agreement are not approved, or the Final Settlement Date is not reached, or this Agreement is terminated, cancelled, or fails to become effective for any reason whatsoever, nothing in this Settlement or this Agreement shall be admissible in any effort to certify this class or any other class in this or any other court under any circumstances. 4. SETTLEMENT RELIEF 4.1 Pursuant and subject to all other terms of this Agreement, and in consideration for the dismissal of the Action with prejudice on the merits and in consideration of the Release and the approval, entry and enforcement thereof by the Court, Ocwen has agreed to provide the Begleys and the Settlement Class with the following relief (and only the following relief), subject to each and all of the terms and conditions specified herein. 4.2 Overview. The relief offered by this Settlement consists of Account Adjustments, which are intended to provide Settlement Class Members the opportunity to obtain a 100% accounting remedy as to all payments made while an ACI Loan was both enrolled in an ACI weekly or bi-weekly payment plan and being serviced on the REALServicing system, so as to compensate them for any and all economic impact to their ACI Loans on account of, or as a result of, any previously uncorrected misapplication of any payments made during that time, including any misapplication of ACI Extra Payments due to or caused by the Extra Payment Processing Issue. 4.3 Each ACI Loan will be entitled to only one Account Adjustment pursuant to this Settlement. Co-debtors, joint-debtors, and multiple borrowers on a single loan are not each Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 26

27 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 27 of 70 entitled to more than one Account Adjustment on the same ACI Loan. 4.4 Account Adjustments for Paid-Off Loans Settlement Class Members having ACI Loans with a Paid-Off Status in Ocwen s records as of the Class Roster Date do not need to submit a Claim Form to obtain an Account Adjustment Within two hundred and seventy (270) days of the Final Settlement Date, the payment history of each ACI Loan having a Paid-Off Status in Ocwen s records as of the Class Roster Date will automatically be reviewed pursuant to the Audit and Remediation Protocol to re-calculate the payoff amount of that ACI Loan as of the loan s actual payoff date Any amount that was previously collected by Ocwen at the actual date of payoff in excess of this re-calculated payoff amount will be that ACI Loan s Account Adjustment, and any such difference will be distributed by check. Unless otherwise mutually agreed by the Parties for good cause shown, such checks shall be made payable jointly to all Settlement Class Members identified in Ocwen s records as borrowers on that ACI Loan. All such checks shall be distributed by the Settlement Administrator within three hundred and fifteen (315) days of the Final Settlement Date, with each check being mailed to the primary borrower on that ACI Loan as determined from Ocwen s records, at the last known address as determined by the Settlement Administrator. 4.5 Active Loans and Transferred Loans The Claims Process will provide the sole means for Settlement Class Members having ACI Loans with an Active Status or a Transferred Status in Ocwen s records as of the Class Roster Date to seek Account Adjustments To seek an Account Adjustment, a Settlement Class Member with an ACI Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 27

28 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 28 of 70 Loan having an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date must complete, personally sign, and timely submit a valid Claim Form to the Settlement Administrator, postmarked sufficiently in advance to ensure that the Claim Form is received by the Settlement Administrator on or before the Claim Form Deadline. Claim Forms received by the Settlement Administrator after the Claim Form Deadline whether postmarked before or after the Claims Form Deadline will be deemed invalid and untimely. Failure to submit a timely and complete Claim Form shall constitute a release and waiver of any rights to claim an Account Adjustment under this Settlement The Claim Form shall be included with the Active/Transfer Class Notice, and shall also be made available on the Settlement Website created and maintained by the Settlement Administrator for purposes of this Settlement, or by contacting the Settlement Administrator by telephone. The Settlement Administrator shall be solely responsible for receiving Claim Forms, as well as requests for Claim Forms, and for promptly delivering Claim Forms to the Settlement Class Members who request them Timely and complete Claim Forms will be processed within two hundred and seventy (270) days of the Final Settlement Date. The processing of a Claim Form will entail a review pursuant to the Audit and Remediation Protocol of the payment history of each ACI Loan listed in the Claim Form to re-calculate the unpaid principal balance and next payment due date of that ACI Loan. Any differences between that ACI Loan s currently-reported and recalculated unpaid principal balances, as well as the currently-reported and recalculated next payment due dates, will be that ACI Loan s Account Adjustment, subject to acceptance by the Claimant pursuant to the procedures described in Sections and Upon completion of the processing of a Claim Form, the Settlement Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 28

29 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 29 of 70 Administrator shall promptly mail the Claimant a Determination Notice, notifying the Claimant of the Account Adjustment, if any, determined to be due on each ACI Loan listed in that Claim Form The Claimant will then have twenty-five (25) days from the date of mailing of the Determination Notice to either (a) accept, or (b) challenge, the Account Adjustments set forth in the Determination Notice. Class Counsel and the Settlement Administrator will use their best efforts to promptly respond to any Claimant inquiries regarding this process. A Claimant s failure to timely accept or challenge the Account Adjustments set forth in the Determination Notice shall constitute a release and waiver of any rights of the Claimant to claim Account Adjustments under this Settlement Procedures for accepting Account Adjustment determinations To accept the Account Adjustments set forth in the Determination Notice, a Claimant must sign and date the Acceptance Form that will be attached to the Determination Notice, and return that Acceptance Form to the Settlement Administrator by facsimile, or regular mail. Unless a valid and complete notice of appeal of the Account Adjustment determination is timely filed in response to the Determination Notice in accordance with the procedures set forth in Section 4.5.8, Acceptance Forms must be received by the Settlement Administrator within twenty-five (25) days from the date of mailing of that Determination Notice; accordingly, Acceptance Forms submitted by regular mail must be postmarked sufficiently in advance to ensure that the Acceptance Form is timely received by the Settlement Administrator. A Claimant s failure to provide a properly completed and signed Acceptance Form to the Settlement Administrator on or before that deadline will constitute a rejection, release and waiver by the Claimant of any right to receive an Account Adjustments Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 29

30 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 30 of 70 under this Settlement Within forty-five (45) days of receipt of a Claimant s signed and timely Acceptance Form, the Account Adjustments set forth in the Determination Notice will be implemented and made effective pursuant to the provisions of Section Procedures for challenging Account Adjustment determinations To challenge the Account Adjustments set forth in the Determination Notice, a Claimant must complete a written notice of appeal of the Account Adjustment determinations and submit it to the Settlement Administrator by facsimile, or regular mail. Notices of appeal must be received by the Settlement Administrator within twentyfive (25) days from the date of mailing of that Determination Notice; accordingly, notices of appeal submitted by regular mail must be postmarked sufficiently in advance to ensure that the Acceptance Form is timely received by the Settlement Administrator. Any such notice of appeal must: (a) include the Claimant s name, mailing and address and contact telephone number, and loan number(s); (b) set forth the specific reasons the Claimant believes he or she is due a different amount as an Account Adjustment under the terms of this Settlement, including all legal support and factual evidence the Claimant wishes to introduce in support of his or her dispute. A Claimant s failure to timely submit a notice of appeal to the Settlement Administrator will constitute a release and waiver of any rights of the Claimant to challenge the accuracy of the Account Adjustment determinations set forth in the Determination Notice Claimants submitting such notices of appeal shall at all times bear the burden of proof by a preponderance of the evidence to show: (1) why and how the Account Adjustments set forth in their Determination Notices are improper under the written terms of the Settlement, and (2) the accuracy of the Account Adjustments that the Claimants contend are due Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 30

31 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 31 of 70 them on their ACI Loans under the express written terms of the Settlement The Settlement Administrator shall promptly submit timely notices of appeal to the Neutral, with copies to the Parties, for final resolution by the Neutral without a hearing, based only upon this Settlement, the Court s Orders approving it, the Claimant s notice of appeal, the Determination Notice, and the Parties submissions in response to the notice of appeal The Parties written responses to a Claimant s notice of appeal must be submitted to the Neutral no later than twenty-one (21) days following their receipt of a copy of the Claimant s notice of appeal from the Settlement Administrator The Neutral shall not have jurisdiction to consider any other form of relief other than the Account Adjustments as expressly defined in the Settlement, the form, nature and amount of which must be consistent with all terms of this Settlement. Subject to this jurisdictional limitation, the Neutral s resolution of the Claimant s petition must be in writing and shall be final, binding and non-appealable by the Claimant and the Parties. Any fees or costs payable to the Neutral for resolving such disputes shall be borne solely by Ocwen. The Parties shall not be responsible for any other costs or fees associated with the resolution of such disputes. Any claim that the Neutral has exceeded his or her jurisdiction shall be presented to the Court for resolution Regardless of whether a notice of appeal is upheld or rejected by the Neutral, a Claimant must still submit by facsimile, or regular mail a properly completed and signed Acceptance Form to the Settlement Administrator for the Account Adjustments set forth in the Neutral s written decision to be implemented. Such Acceptance Forms must be received by the Settlement Administrator within twenty-five (25) days from the Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 31

32 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 32 of 70 date of the Neutral s written decision; accordingly, Acceptance Forms submitted by regular mail must be postmarked sufficiently in advance to ensure that the Acceptance Form is timely received by the Settlement Administrator Account Adjustment distribution for Active and Transferred Loans Account Adjustments for ACI Loans having an Active Status or Transferred Status in Ocwen s records as of the date of Claim Form processing shall be distributed whenever feasible as credits (i.e., reductions) to the unpaid principal balances of those ACI Loans. For any ACI Loan listed in a Claim Form having a Transferred Status in Ocwen s records as of the Class Roster Date, Ocwen will use its best efforts to seek the cooperation of the transferee servicer to obtain information on the post-transfer payment and servicing histories for that ACI Loan, so that the Account Adjustments account for and correct the post-transfer effects of any misapplications of ACI Extra Payments made to Ocwen while the ACI Loan was on REALServicing. For this purpose, the Claim Form will authorize Ocwen to obtain post-transfer loan and payment histories and related information from the transferee servicer. If any transferee servicer(s) refuses to provide such information or otherwise refuses to cooperate in the calculation of Account Adjustments, the Determination Notice for that Claim Form shall so state, and the Determination Notice shall then calculate the Account Adjustment for that ACL Loan as if that ACI Loan had been paid-off on the actual date of servicing transfer from Ocwen, with the resulting Account Adjustment to be distributed by check. Unless otherwise mutually agreed by the Parties for good cause shown, such checks shall be made payable jointly to all Settlement Class Members identified in Ocwen s records as borrowers on that ACI Loan. All such checks shall be distributed by the Settlement Administrator within three hundred and fifteen (315) days of the Final Settlement Date, with each check being mailed to the primary borrower on that ACI Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 32

33 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 33 of 70 Loan as determined from Ocwen s records, at the last known address as determined by the Settlement Administrator Account Adjustments for ACI Loans having an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date, but having a Paid-Off Status as of the date of Claim Form processing (as determined either from Ocwen s records or as reported by third-party transferee servicers), shall be paid by check. Unless otherwise mutually agreed by the Parties for good cause shown, such checks shall be made payable jointly to all Settlement Class Members identified in Ocwen s records as borrowers on that ACI Loan. All such checks shall be distributed by the Settlement Administrator within three hundred and fifteen (315) days of the Final Settlement Date, with each check being mailed to the primary borrower on that ACI Loan as determined from Ocwen s records, at the last known address as determined by the Settlement Administrator For any ACI Loan that was not delinquent before acceptance of an Account Adjustment but would immediately become delinquent upon acceptance of an Account Adjustment, whether because payments were skipped or for any other reason, any late fees which are solely attributable to the delinquency created solely by acceptance of the Account Adjustment and which would otherwise be incurred in the month in which the Account Adjustment is implemented or during the first two full calendar months following the Account Adjustment s implementation will be waived. The purpose of this moratorium on late fees is to provide a grace period for the ACI Loan to be brought current without incurring a late fee. For ACI Loans with a Transferred Status, and for which acceptance of the Account Adjustment would place the loan in a delinquent status, if the transferee servicers do not agree to this grace period then the ACI Loan will be treated as if that ACI Loan had been paid-off on the actual date Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 33

34 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 34 of 70 of servicing transfer from Ocwen, with the resulting Account Adjustment to be distributed by check. Unless otherwise mutually agreed by the Parties for good cause shown, such checks shall be made payable jointly to all Settlement Class Members identified in Ocwen s records as borrowers on that ACI Loan. All such checks shall be distributed by the Settlement Administrator within three hundred and fifteen (315) days of the Final Settlement Date, with each check being mailed to the primary borrower on that ACI Loan as determined from Ocwen s records, at the last known address as determined by the Settlement Administrator. 4.6 Reports and Monitoring Beginning thirty (30) days after the date of entry of the Preliminary Approval Order and continuing week to week thereafter, the Settlement Administrator shall provide periodic updates to Class Counsel and Ocwen s Counsel regarding the number of Claim Forms that have been submitted, the identities of the Claimants, and copies of the actual Claim Forms submitted Class Counsel shall at all times have the right to review and monitor the Claims Process, and shall receive a report of the results of the audit associated with each Claim, along with a final summary identifying all Account Adjustments determined to be due in response to the Claims Process. 4.7 Settlement Checks Must Be Promptly Claimed. All Account Adjustments distributed by check shall state on the face of the check that the check will expire and become null and void unless cashed within one hundred twenty (120) days after the date of issuance of the check. Checks for Account Adjustments that are not deposited or cashed within one hundred twenty (120) days after the date of issuance of the check, or which remain undeliverable after reasonable efforts to locate the Claimants, (a) will be null and void; (b) the Settlement Class Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 34

35 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 35 of 70 Members to whom the checks were issued will be barred from receiving Account Adjustments under this Settlement; and (c) the amount of such checks shall, no sooner than one year after the Final Settlement Date, be paid to Homes For Our Troops, a privately funded 501(c)(3) nonprofit organization that builds mortgage-free, specially adapted homes nationwide for severely injured Veterans Post-9/11, to enable them to rebuild their lives. (last visited Feb. 24, 2017). 4.8 Settlement Administration Costs. As further consideration for the dismissal of the Action with prejudice on the merits and entry of the Release, Ocwen has agreed, subject to the terms of this Agreement, to pay or cause to be paid all of the Costs of Administration associated with administering the Settlement and providing notice to the Settlement Class, which amounts shall be paid separate and apart from the Account Adjustments, Attorneys Fees and Expenses and Service Award set forth in this Agreement. 5. NOTICE TO, AND COMMUNICATIONS WITH, THE SETTLEMENT CLASS 5.1 Notice to Appropriate Federal and State Officials. Pursuant to the notice provisions of the Class Action Fairness Act, 28 U.S.C. 1715, within ten (10) days after this Agreement is deemed filed with the Court, Ocwen will provide notice of the Action and this Agreement to the Attorney General of the United States; the Consumer Finance Protection Bureau; the Federal Trade Commission; and the Attorneys General of the States, Districts, Commonwealths and Territories in which Settlement Class Members are determined to reside based on the borrower mailing addresses for the relevant mortgaged properties as reflected in Ocwen s records. Ocwen will make a copy of these notices available for review by Class Counsel. 5.2 Individual Notice to Settlement Class Members. Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 35

36 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 36 of Subject to the requirements of the Preliminary Approval Order, the Parties shall cause the Settlement Administrator to send, no later than twenty-one (21) days after entry of the Preliminary Approval Order: (a) the Paid-Off Class Notice by First-Class U.S. Mail, proper postage prepaid, to each Settlement Class Member having an ACI Loan with a Paid-Off Status in Ocwen s records as of the Class Roster Date; and (b) the Active/Transfer Class Notice by First-Class U.S. Mail, proper postage prepaid, to each Settlement Class Member having an ACI Loan with an Active Status or Transferred Status in Ocwen s records as of the Class Roster Date. Prior to mailing, the Settlement Administrator shall attempt to update the last known addresses of the Settlement Class Members through the National Change of Address system or similar databases, supplemented by skip-tracing for all ACI Loans with a Paid-Off Status in Ocwen s records as of the Class Roster Date The Paid-Off Class Notice and Active/Transfer Class Notice shall each advise Settlement Class Members of the following: General Terms. The Paid-Off Class Notice and Active/Transfer Class Notice shall each contain a plain, neutral, objective and concise summary description of the nature of the Action and the terms of the proposed Settlement. This description shall also disclose, among other things, that (a) any relief to Settlement Class Members offered by the Settlement is contingent upon the Court s approval of the Settlement, which will not become effective until the Final Settlement Date; (b) Ocwen has agreed that Class Counsel and the Begleys have the right to petition the Court for an award of Attorneys Fees and Expenses in an amount to be determined by the Court but not to exceed Two Million Dollars ($2,000,000.00), and Ocwen has agreed to pay Attorneys Fees and Expenses up to that amount subject to Court approval, (c) Ocwen also agrees to pay a Service Award to the Begleys in an Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 36

37 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 37 of 70 amount to be determined by the Court but not to exceed Five Thousand Dollars ($5,000.00) payable to them jointly; and (d) the Settlement is not made contingent upon any particular amount of Service Award or Attorneys Fees and Expenses being awarded by the Court The Settlement Class. The Paid-Off Class Notice and Active/Transfer Class Notice shall each describe the Settlement Class, and shall disclose that the Settlement Class has been preliminarily certified for purposes of settlement only Opt-Out Rights. The Paid-Off Class Notice and Active/Transfer Class Notice shall each inform the Settlement Class Members of their right to seek exclusion from the Settlement Class and the Settlement, and provide the deadlines and procedures for exercising this right Objection to Settlement. The Paid-Off Class Notice and Active/Transfer Class Notice shall each inform Settlement Class Members of their right to object to the proposed Settlement and to appear at the Fairness Hearing, and provide the deadlines and procedures for exercising these rights Fairness Hearing. The Paid-Off Class Notice and Active/Transfer Class Notice shall each disclose the date and time of the Fairness Hearing, and explain that the Fairness Hearing may be rescheduled without further notice to the Settlement Class. If there is a change to the date or time of the Fairness Hearing, that change will be reflected on the Settlement Website Release. The Paid-Off Class Notice and Active/Transfer Class Notice shall each summarize or recite the proposed terms of the Release contemplated by this Agreement Interim Injunctions. The Paid-Off Class Notice and Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 37

38 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 38 of 70 Active/Transfer Class Notice shall describe any injunctions issued by the Court in its Preliminary Approval Order Further information. The Paid-Off Class Notice and Active/Transfer Class Notice shall each disclose where Settlement Class Members may direct written or oral inquiries regarding the Settlement, and also where they may obtain additional information about the Action, including instructions on how to Settlement Class Members can access the case docket using PACER or in person at any of the court s locations The Paid-Off Class Notice and Active/Transfer Class Notice shall be the legal notice to be provided to the Settlement Class Members, and shall otherwise comply with Federal Rule of Civil Procedure 23 and any other applicable statutes, laws and rules, including, but not limited to, the Due Process Clause of the United States Constitution Following issuance of the Preliminary Approval Order, Class Counsel and Ocwen s Counsel may by mutual agreement make any changes in the font, format or content of the Paid-Off Class Notice and Active/Transfer Class Notice or the exhibits thereto any time before those notices are first mailed to Settlement Class Members, so long as such changes do not materially alter the substance of the Paid-Off Class Notice or Active/Transfer Class Notice. Any material substantive changes proposed by Class Counsel and Ocwen s Counsel following issuance of the Preliminary Approval Order must be approved by the Court The Parties shall cause the Settlement Administrator to promptly r any Paid-Off Class Notices and Active/Transfer Class Notices returned by the United States Postal Service with a forwarding address and shall continue to do so with respect to any such returned mail that is received seven (7) days or more prior to the Objection/Exclusion Deadline. With respect to Paid-Off Class Notices and Active/Transfer Class Notices that are returned by Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 38

39 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 39 of 70 the United States Postal Service without a new or forwarding address, the Parties shall cause the Settlement Administrator to as soon as practicable determine whether a valid address can be located through use of the United States Postal Service s National Change of Address database and/or other reasonable means and without undue cost and delay, and then promptly r Paid-Off Class Notices and Active/Transfer Class Notices to any Settlement Class Member for whom the Settlement Administrator is reasonably able to locate a valid address in accordance herewith, so long as the valid address is obtained by the Settlement Administrator seven (7) days or more prior the Objection/Exclusion Deadline. 5.3 Settlement Website. The Parties shall cause the Settlement Administrator to establish the Settlement Website, whose address shall be included and disclosed in both the Paid- Off Class Notice and Active/Transfer Class Notice, which will inform Settlement Class Members of the terms of this Agreement, their rights, dates and deadlines and related information. The website shall include, in.pdf format, a copy of the Operative Complaint, this Settlement and its exhibits, any Preliminary Approval Order entered by the Court, a copy of both the Paid-Off Class Notice and Active/Transfer Class Notice, and the Claim Form, along with such other information as Court may designate or the Parties may agree to post there. The Settlement Website will be operational and live by the date of the first mailing of the Paid-Off Class Notice and Active/Transfer Class Notice. 5.4 Not later than ten (10) days before the date of the Fairness Hearing, the Settlement Administrator, and to the extent necessary the Parties, shall file with the Court a declaration or declarations, based on the personal knowledge of the declarant(s), verifying compliance with these classwide notice procedures. 5.5 Ocwen expressly reserves, and the Parties agree that Ocwen shall have the right to Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 39

40 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 40 of 70 communicate with, and respond to inquiries from, Settlement Class Members in the ordinary course of Ocwen s business. However, any inquiries about this Agreement or about the Action shall be referred by Ocwen to Class Counsel or the Settlement Administrator. 5.6 Media Communications Class Counsel and Ocwen s Counsel agree to cooperate in good faith to ensure that: (a) any comments about or descriptions of this Settlement and Agreement or its value or cost in the media or in any other public forum apart from the Action are balanced, fair and accurate; and (b) any press releases or public communications regarding the Agreement are reviewed and mutually approved and agreed to by Class Counsel and Ocwen s Counsel before dissemination or publication After execution of this Agreement, Class Counsel and Ocwen s Counsel may, after mutual consultation, make only mutually agreeable press communications announcing the Settlement, but shall not otherwise issue any press release or printed or broadcast public communication about this Agreement or the Settlement Ocwen may disclose and discuss this Agreement to and with its parent companies, affiliated companies, customers and clients, and each of their respective accountants, shareholders, auditors, consultants and investors, as well as with government entities as necessary to comply with applicable law; except as prohibited by law or regulation. Any written communications with government entities that occur prior to Final Judgment and which relate to any actual or contemplated objection or intervention in this action by a regulator shall be contemporaneously provided to Class Counsel as well. 6. REQUESTS FOR EXCLUSION 6.1 Any Settlement Class Member who wishes to be excluded from the Settlement Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 40

41 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 41 of 70 Class must mail a written request for exclusion to the Settlement Administrator at the address provided in the Paid-Off Class Notice and Active/Transfer Class Notice, mailed sufficiently in advance to be received by the Settlement Administrator no later than the Objection/Exclusion Deadline, or as the Court otherwise may direct. A written request for exclusion must: (a) contain a caption or title that identifies it as Request for Exclusion in Begley v. Ocwen Loan Servicing, LLC (case number 3:16-cv MCR-CJK); (b) include the Settlement Class Member s name, mailing and addresses, and contact telephone number; (c) specify that he or she wants to be excluded from the Settlement Class and identify the loan number(s) for which he or she seeks exclusion from the Settlement; and (d) be personally signed by the Settlement Class Member. The requirements for submitting a timely and valid request for exclusion shall be set forth in the Paid-Off Class Notice and Active/Transfer Class Notice. 6.2 Each Settlement Class Member who wishes to be excluded from the Settlement Class must submit his or her own personally signed written request for exclusion. A single written request for exclusion submitted on behalf of more than one Settlement Class Member will be deemed invalid; provided, however, that an exclusion received from one Settlement Class Member will be deemed and construed as a request for exclusion by all co-debtors, joint-debtors and multiple borrowers on the same loan. 6.3 Unless excluded by separate Order entered by the Court for good cause shown prior to the final approval of this Settlement, any Settlement Class Member who fails to strictly comply with the procedures set forth in this Section 6 for the submission of written requests for exclusion will be deemed to have consented to the jurisdiction of the Court, will be deemed to be part of the Settlement Class, and will be bound by all subsequent proceedings, orders, and judgments in the Action, including, but not limited to, the Release, even if he or she has litigation Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 41

42 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 42 of 70 pending or subsequently initiates litigation against Ocwen relating to the claims and transactions released in the Action. 6.4 The Settlement Administrator shall file with the Court, no later than ten (10) days before the Fairness Hearing, a list reflecting all requests for exclusion it has received. The list shall also identify which of those requests for exclusion were received late, and which requests for exclusion failed to comply with the requirements of this Section OBJECTIONS TO SETTLEMENT 7.1 Any Settlement Class Member who has not filed a timely written request for exclusion and who wishes to object to the fairness, reasonableness, or adequacy of this Agreement or the proposed Settlement, or to the award of Attorneys Fees and Expenses, or the Service Award, or to any other aspect or effect of the proposed Settlement, must file with the Court a written statement of his or her objection no later than the Objection/Exclusion Deadline, or as the Court otherwise may direct. To file a written statement of objection, a Settlement Class Member must (a) mail it to the Clerk of the Court in time to be received by the Clerk of the Court on or before the Objection/Exclusion Deadline, or (b) file it in person on or before the Objection/Exclusion Deadline at any location of the United States District Court for the Northern District of Florida, except that any objection made by a Settlement Class Member represented by counsel must be filed through the Court s Case Management/Electronic Case Filing (CM/ECF) system. 7.2 A written statement of objection must: (a) contain a caption or title that identifies it as Objection to Class Settlement in Begley v. Ocwen Loan Servicing, LLC (case number 3:16- cv mcr-cjk); (b) include the Settlement Class Member s name, mailing and Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 42

43 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 43 of 70 addresses contact telephone number, and identify the loan number(s) for which an objection is being made; (c) set forth the specific reason(s), if any, for each objection, including all legal support the Settlement Class Member wishes to bring to the Court s attention and all factual evidence the Settlement Class Member wishes to introduce in support of the objection; (d) disclose the name and contact information of any and all attorneys representing, advising, or in any way assisting the Settlement Class Member in connection with the preparation or submission of the objection; and (e) be personally signed by the Settlement Class Member. 7.3 A Settlement Class Member may file and serve a written statement of objection either on his own or through an attorney retained at his own expense; provided, however, that a written statement of objection must be personally signed by the Settlement Class Member, regardless of whether he has hired an attorney to represent him. 7.4 Any Settlement Class Member who properly files and serves a timely written objection, as described in this Section 7, may appear at the Fairness Hearing, either in person or through personal counsel hired at the Settlement Class Member s own expense, to object to the fairness, reasonableness, or adequacy of this Agreement or the proposed Settlement, or to the award of Attorneys Fees and Expenses or Service Award, or to any other aspect or effect of the proposed Settlement. However, any Settlement Class Member who intends to make an appearance at the Fairness Hearing must include a statement to that effect in his or her objection. If a Settlement Class Member hires his or her own personal attorney to represent him or her in connection with an objection, and if the attorney wishes to appear at the Fairness Hearing, the attorney must: (a) file a notice of appearance with the Clerk of the Court in the Action no later than thirty-five (35) days before the originally scheduled date of the Fairness Hearing (if the Fairness Hearing is continued, the deadline runs from the first-scheduled Fairness Hearing); and Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 43

44 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 44 of 70 (b) serve and deliver a copy of that notice of appearance to Class Counsel and Ocwen s Counsel no later than thirty-five (35) days before the originally scheduled date of the Fairness Hearing (if the Fairness Hearing is continued, the deadline runs from the first-scheduled Fairness Hearing). 7.5 Any Settlement Class Member who fails to strictly comply with the provisions and deadlines of this Section 7 shall waive any and all objections to the Settlement, its terms, or the procedures for its approval, shall forfeit any and all rights he or she may have to appear separately and/or to object, and will be deemed to have consented to the jurisdiction of the Court, to be part of the Settlement Class, and to be bound by all subsequent proceedings, orders, and judgments in the Action, including, but not limited to, the Release. 7.6 Any Settlement Class Member who objects to the Settlement but does not file an exclusion request shall, unless he or she is subsequently excluded by Order of the Court, remain a Settlement Class Member and therefore be entitled to all of the benefits and obligations of the Settlement, and be subject to all of its terms, if this Agreement and the terms contained therein are approved and the Final Settlement Date is reached. 8. RELEASE AND WAIVER 8.1 The Parties agree to the following release and waiver, which shall take effect upon the Final Settlement Date (the following, separately and severally, shall be referred to for purposes of this Agreement as the Released Claims ): In consideration for the Settlement benefits described in this Agreement, the Begleys and the other members of the Settlement Class who do not timely and validly request to be excluded from the Settlement, on behalf of themselves and all of their present, former and future heirs, guardians, assigns, executors, administrators, representatives, agents, attorneys, partners, legatees, predecessors, and/or successors, will, by virtue of this Agreement and by virtue of the Court s Final Order and Judgment, (1) be deemed to have fully, finally and forever released, remised, relinquished, acquitted, and forever discharged, each and all of the Released Parties of and from, and shall be permanently enjoined from pursuing, any and all actual, potential, filed or unfiled, known or unknown, fixed Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 44

45 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 45 of 70 or contingent, suspected or unsuspected, claims, demands, liabilities, damages (including but not limited to punitive, exemplary, multiple or statutory damages), charges, penalties, losses, rights, actions, causes of action, expenses, costs, attorneys fees, suits, judgments or other avenues of relief, whether arising at law, in equity, by regulation, or otherwise, whether direct, individual or representative, and whether or not previously asserted, mature or not yet mature, known or unknown, suspected or unsuspected, contingent or non-contingent; whether assertable in the form of a cause of action or as a private motion, petition for relief or claim for contempt, or otherwise, and in any court, tribunal, arbitration panel, commission, agency, or before any governmental and/or administrative body, or any other adjudicatory body, and whether based on federal, state, local, statutory or common law or any other law, rule, regulation, ordinance, code, contract, common law, or any other source, including the law of any jurisdiction outside the United States (including both direct and derivative claims) against the Released Parties, or any of them, arising or resulting in whole or in part from any applications or misapplications of any payments made to Ocwen on any ACI Loan while the loan was being serviced by Ocwen on the REALServicing loan servicing platform, or resulting in whole or in part from any loan information contained in any written statements or notices sent to the borrower or anyone else concerning an ACI Loan as a result of those payment applications or misapplications, including but not limited to the claims made in the Operative Complaint; and (2) be deemed to have fully, finally and forever ratified Ocwen s application of all payments made on an ACI Loan on or before the date of entry of the Court s Final Order and Judgment while the ACI Loan was being serviced on REALServicing, as modified by any Account Adjustments that are awarded pursuant to the terms of this Settlement. The Released Parties are further specifically released from any and all liability arising directly or indirectly or in whole or in part from, or relating in any way to Ocwen s application or misapplication of payments made by a Settlement Class Member under one of the ACI Worldwide, Inc. weekly or bi-weekly accelerated payoff programs while his or her loan was being serviced by Ocwen on the REALServicing loan servicing platform, and from any claims arising in whole or in part from the termination of the ACI programs. However, nothing herein will release any claim that, any fee, late fee, escrow or insurance charge was improperly assessed, charged or imposed on any individual ACI Loan for reasons entirely unrelated to the Extra Payment Processing Issue. 8.2 The Begleys represent and warrant that they are the sole and exclusive owners of all claims that they are personally releasing under this Agreement. The Begleys further acknowledge that they have not assigned, pledged, or in any manner whatsoever, sold, transferred, assigned or encumbered any right, title, interest or claim arising out of or in any way whatsoever pertaining to the Action, and that they are not aware of anyone other than themselves Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 45

46 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 46 of 70 claiming any interest, in whole or in part, in the Action or in any benefits, proceeds or values under the Action on their behalf. 8.3 Without in any way limiting its scope, and, except to the extent otherwise specified in this Agreement, this Release covers by example and without limitation, any and all claims for attorneys fees, costs, expert fees, consultant fees, interest, litigation fees, costs or any other fees, costs, and/or disbursements incurred by Class Counsel, or by the Begleys or by the Settlement Class Members regarding Released Claims for which any of the Released Parties might otherwise be claimed liable. 8.4 The Begleys expressly understand and acknowledge, and all Settlement Class Members will be deemed by the Final Order and Judgment to acknowledge, that certain principles of law, including, but not limited to, Section 1542 of the Civil Code of the State of California, provide that A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. To the extent that anyone might argue that these principles of law are applicable, the Begleys hereby agree that the provisions of all such principles of law or similar federal or state laws, rights, rules, or legal principles, to the extent they are found to be applicable herein, are hereby knowingly and voluntarily waived, relinquished and released by them and all Settlement Class Members. The Begleys acknowledge, and all Settlement Class Members will be deemed by the Final Order and Judgment to acknowledge, that they are aware that they could conceivably hereafter discover claims that were existing in the past or present, that may be presently unknown or unsuspected, Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 46

47 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 47 of 70 or facts in addition to or different from those that they now know or believe to be true with respect to the allegations or subject matters in the Action or with respect to the Released Claims but, nevertheless, intend to fully, finally and forever settle and release such matters, and all claims relating thereto, which exist, hereafter may exist, or might have existed (whether or not previously or current asserted in any action or proceeding) related in any way to the facts, transactions, and claims asserted in the Action or with respect to the Released Claims. 8.5 The Parties and each of the Settlement Class Members who do not timely and validly exclude themselves in accordance with the procedures set forth in the Paid-Off Class Notice and Active/Transfer Class Notice shall be deemed to have agreed that the Release set forth herein will be and may be raised as a complete defense to and will preclude any action or proceeding based in whole or in part upon the claims released by and through this Agreement. The Begleys acknowledge and agree, and all Settlement Class Members (other than those who timely and validly exclude themselves in accordance with the procedures set forth in the Paid- Off Class Notice and Active/Transfer Class Notice) will be deemed by the Final Order and Judgment to have agreed, that each of them shall be permanently barred and enjoined by the Final Order and Judgment from hereafter instituting, participating in, prosecuting or maintaining, either directly or indirectly, on their own behalf, or on behalf of the Settlement Class or any other Settlement Class Member, person or entity, any action or proceeding of any kind asserting any of the Released Claims. 8.6 Neither the Settlement, nor the Release, nor any of the relief to be offered pursuant to the Settlement shall: (a) alter or extinguish (or be construed as altering or extinguishing) the terms of the debts, promissory notes, mortgages, security interests and other pre-existing contracts of the Settlement Class Members still in effect; (b) constitute a novation or Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 47

48 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 48 of 70 release of those debts, promissory notes, mortgages, security interests and other pre-existing contracts; or (c) in any way alter the rights of any party under those debts, promissory notes, mortgages, security interests and other pre-existing contracts that are at issue in this Action. Such debts, promissory notes, mortgages, security interests and other pre-existing contracts are in no way affected by this Agreement, the Settlement, or the Release, except and solely to the extent of the potential Account Adjustments to which Settlement Class Members may be entitled under the Settlement. Nothing in this Agreement, the Settlement or the Release shall prevent the Released Parties from continuing to service or collect such debts, promissory notes, mortgages, security interests and other pre-existing contracts, including, without limitation, through the initiation or continued maintenance of proceedings to enforce such security interests and mortgages (including, without limitation, through foreclosure) against the Begleys or Settlement Class Members. Provided, however, that Ocwen s prior termination of the ACI weekly, ACI biweekly and other ACI programs shall not be altered by this Settlement. 8.7 The Preliminary Approval Order shall contain a preliminary injunction against filing, prosecution, or maintenance by Settlement Class Members of actions asserting claims that would be subject to the Release provided for by this Agreement, in order to protect the Court s jurisdiction and facilitate the Court s consideration of whether final approval of this Agreement and the Settlement is appropriate. 8.8 Subject to the provisions of this Section 8 and the injunctions contemplated thereby, nothing in this Release shall preclude any filing in this Action seeking to have the Court enforce the terms of this Agreement, including participation in any of the processes detailed therein. 8.9 The Parties hereby agree and acknowledge that the provisions of this Release Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 48

49 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 49 of 70 together constitute an essential and material term of this Agreement and shall be included, approved and made effective in any Final Order and Judgment entered by the Court. 9. ATTORNEYS FEES AND EXPENSES AND SERVICE AWARDS 9.1 The Parties negotiations and mediation regarding fees, costs and expenses took place only after they reached an agreement in principle as to all other material terms of this Agreement. As a result of their negotiations and compromises, the Parties have agreed that Class Counsel shall be entitled to apply to the Court for an aggregate award of Attorneys Fees and Expenses in an aggregate amount not to exceed Two Million Dollars ($2,000,000.00), to compensate Class Counsel (as well as any and all other past, present and future attorneys for the Settlement Class) for all past, present and future attorneys fees, costs (including court costs), expenses and disbursements of such attorneys and any of their experts, investigators, staff and consultants combined, and that Ocwen agrees to pay an award of Attorneys Fees and Expenses that does not exceed that aggregate amount of Two Million Dollars ($2,000,000.00) subject to Court approval. Class Counsel agree not to seek or accept any amount or award of Attorneys Fees and Expenses in excess of this total aggregate amount. 9.2 The Parties have also agreed that Class Counsel shall be entitled to apply to the Court for a Service Award of up to Five Thousand Dollars ($5,000.00), to be paid jointly to the Begleys, and that Ocwen agrees to pay for a Service Award to the Begleys of up to that amount. The purpose of the Service Award is to compensate the Begleys for the efforts and risks taken by them in bringing and prosecuting the Action on behalf of the Settlement Class Members and achieving the benefits of this Agreement on behalf of the Settlement Class. 9.3 Within seven (7) business days after the later of (a) the Final Settlement Date or (b) receipt of wire instructions from Class Counsel, Ocwen shall pay any Class Counsel any Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 49

50 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 50 of 70 Attorneys Fees and Expenses and Service Award that may be awarded by the Court. Class Counsel shall then be solely responsible for distributing any Service Award to the Begleys and for distributing any Attorneys Fees and Expenses award by and among Class Counsel. 9.4 The amounts awarded by the Court in Attorneys Fees and Expenses shall be the sole aggregate compensation paid by Ocwen for Class Counsel representing the Settlement Class. It is a condition of this Settlement that Ocwen shall not be liable to anyone else for any attorneys fees or costs, or any claim by any other counsel or Settlement Class Member for additional attorneys fees, incentive or service awards, costs or expenses, relating in any way to the Action, the Settlement, its administration and implementation, any appeals of orders or judgments relating to the Settlement, any objections or challenges to the Settlement, and/or any proceedings on behalf of Settlement Class Members who do not exclude themselves from the Settlement Class based on any of the claims or allegations forming the basis of the Action or any other claims that are defined as Released Claims in this Settlement. If any other or additional attorneys fees, costs, incentive or service awards, or expenses are awarded to parties other than the Begleys and Class Counsel, Ocwen at its sole option may declare this Agreement void as set forth in Section The denial, downward modification, or failure to grant any petition by the Begleys and Class Counsel for Attorneys Fees and Expenses and a Service Award shall not constitute grounds for modification or termination of this Agreement or the Settlement proposed herein. 10. PRELIMINARY APPROVAL ORDER, FINAL ORDER AND JUDGMENT, AND RELATED ORDERS 10.1 Promptly after the execution of this Agreement, Class Counsel shall submit this Agreement together with its exhibits to the Court and shall move the Court for entry of a Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 50

51 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 51 of 70 Preliminary Approval Order of the Settlement set forth in this Agreement, certification of the Settlement Class for settlement purposes only, appointment of Class Counsel and the Begleys as the representatives of the Settlement Class, set a date for the Fairness Hearing and approve the Paid-Off Class Notice and Active/Transfer Class Notice for dissemination to the Settlement Class After the dissemination of the Paid-Off Class Notice and Active/Transfer Class Notice, and not later than ten (10) days before the Fairness Hearing, Class Counsel on behalf of the Begleys shall move the Court to enter a Final Order and Judgment. The Final Order and Judgment shall, among other things: Find that the Court has personal jurisdiction over the Parties and all Settlement Class Members and that the Court has subject matter jurisdiction to approve the Agreement, including all attached exhibits; Approve the Agreement and the proposed Settlement as fair, reasonable and adequate as to, and in the best interests of, the Settlement Class Members; direct the Parties and their counsel to implement and consummate the Agreement according to its terms and provisions; and declare the Agreement to be binding upon, and have res judicata and collateral estoppel effect in all pending and future lawsuits or other proceedings maintained by or on behalf of the Begleys and those Settlement Class Members who did not timely and validly request to be excluded from the Settlement and Settlement Class; Find that the Paid-Off Class Notice and Active/Transfer Class Notice implemented pursuant to the Agreement (a) constituted the best practicable notice under the circumstances; (b) constituted notice that is reasonably calculated, under the circumstances, to apprise the Settlement Class of the pendency of the Action, their right to object or exclude Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 51

52 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 52 of 70 themselves from the Agreement and proposed Settlement; and to appear at the Fairness Hearing; (c) was reasonable and constituted due, adequate and sufficient notice to all persons entitled to receive notice; and (d) met all applicable requirements of the Federal Rules of Civil Procedure, the Due Process Clause of the United States Constitution, and the rules of the Court; Find that the Begleys and Class Counsel adequately represented the Settlement Class for purposes of entering into and implementing the Agreement; Dismiss the Action (including all individual claims and class action claims presented thereby) on the merits and with prejudice, without fees or costs to any party except as provided in this Agreement; Incorporate the Release set forth in Section 8 of this Agreement, make the Release effective as of the Final Settlement Date, and forever discharge the Released Parties as set forth in this Agreement; Permanently bar and enjoin all Settlement Class Members who did not timely and validly request to be excluded from the Settlement and Settlement Class from filing, commencing, prosecuting, intervening in, or participating (as class members or otherwise) in, any lawsuit or other action in any jurisdiction based on the Released Claims; Authorize the Parties, without further approval from the Court, to agree to and adopt such amendments, modifications and expansions of this Agreement and its implementing documents (including all exhibits to this Agreement) if such changes are not materially inconsistent with the Court s Final Order and Judgment or do not materially limit, or materially and adversely affect, the rights or obligations of the Settlement Class Members under this Agreement; and Without affecting the finality of the Final Order and Judgment for Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 52

53 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 53 of 70 purposes of appeal, retain jurisdiction as to the administration, consummation, enforcement and interpretation of this Agreement and the Final Order and Judgment, and for any other necessary purpose. 11. MODIFICATION, DISAPPROVAL, CANCELLATION OR TERMINATION OF THIS AGREEMENT 11.1 Prior to entry of the Final Order and Judgment, the terms and provisions of this Agreement may be amended, modified, or expanded by written agreement of the Parties and approval of the Court; provided, however, that after entry of the Final Order and Judgment, the Parties may by mutual written agreement effect such amendments, modifications or expansions of this Agreement and its implementing documents (including all exhibits hereto) without further notice to the Settlement Class or approval of the Court if such changes are not materially inconsistent with the Court s Final Order and Judgment and do not materially limit, or materially and adversely affect, the rights or obligations of Settlement Class Members under this Agreement This Agreement shall terminate at the sole option and discretion of either Party if: (a) the Court, or any appellate court(s), rejects, modifies, or denies approval of any portion of this Agreement that the terminating Party in his or its sole judgment and discretion determine(s) is material, including, without limitation, the terms of relief, the findings or conclusions of the Court, the provisions relating to notice (including the proposed plan for the dissemination of notice to the Settlement Class as set forth in Section 5 of this Agreement), the definition of the Settlement Class and the terms and conditions for its certification, and/or the terms of the Release; or (b) the Court, or any appellate court(s), does not enter or completely affirm, or alters or expands, any portion of the Final Order and Judgment, or any of the Court s findings of fact or conclusions of law, that the terminating Party in his or its sole judgment an discretion Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 53

54 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 54 of 70 determine(s) is material. However, under no circumstances shall the Court s failure to approve, in whole or in part, any petition by the Begleys and Class Counsel for a Service Award and Attorneys Fees and Expenses as set forth in Section 9 of this Agreement provide the Begleys or Class Counsel with a basis for terminating this Agreement Ocwen may also in its sole and absolute judgment and discretion elect to terminate this Agreement if: (a) any attorneys fees and costs, expert fees, costs, expenses, service awards or incentive awards are awarded to anyone other than the Begleys and Class Counsel; or (b) six hundred and ninety four (694) or more Settlement Class Members submit written requests for exclusion which are deemed timely, valid and effective by the Court Any terminating Party must exercise its option to withdraw from and terminate this Agreement, as provided in this Section 11, by a signed writing served on the other Party no later than thirty-five (35) days after receiving notice of the event prompting the termination unless there is a motion or petition seeking reconsideration, alteration or appeal review of the event, in which case no later than thirty-five (35) days after the final conclusion of any such motion or petition seeking reconsideration, alteration, or appellate review thereof, whichever is later If any of the foregoing termination events occurs, no Party is required for any reason or under any circumstance to exercise that option If the Final Settlement Date does not occur or this Agreement is terminated pursuant to the provisions of this Section 11, then: This Agreement shall be null and void and shall have no force or effect, through principles of estoppel, res judicata, or otherwise, and no Party to this Agreement shall be bound by any of its terms, except for the terms of this Paragraph 11.6 and its sub-sections; Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 54

55 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 55 of This Agreement, all of its provisions, and all negotiations, statements, documents, orders and proceedings relating to it shall be inadmissible in evidence for any purpose, and shall be without prejudice to the rights of Ocwen, the Begleys and the Settlement Class, all of whom shall be restored to their respective positions in the Action as of the date existing immediately before the signing of this Agreement, except that the Parties shall cooperate in requesting that the Court set a new scheduling order such that neither Party s substantive or procedural rights is prejudiced by the attempted Settlement; Neither this Agreement, nor the Settlement contained in this Agreement, nor any act performed or document executed pursuant to or in furtherance of this Agreement or the Settlement: Is, may be deemed, or shall be used, offered or received against the Released Parties, or each or any of them, as an admission, concession, or evidence of, the validity of any Released Claims, the truth of any fact alleged by the Begleys, the deficiency of any defense that has been or could have been asserted in the Action, the violation of any law or statute, the reasonableness of the Settlement amount or of Class Counsel s reasonable attorneys fees and expenses, or of any alleged wrongdoing, liability, negligence or fault of the Released Parties, or any of them; Is, may be deemed, or shall be used, offered, or received against the Begleys, the Settlement Class or each or any of them as an admission, concession, or evidence of any fault, misrepresentation, or omission with respect to any statement or written document approved or made by the Released Parties, or any of them; and Is, may be deemed, or shall be used, offered, or received against the Released Parties, or each or any of them, as an admission or concession with respect Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 55

56 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 56 of 70 to any liability, negligence, fault or wrongdoing as against any Released Parties, or of the certifiability of any class, in any civil, criminal or administrative proceeding in any court, administrative agency, or other tribunal. However, the Settlement, this Agreement, and any acts performed and/or documents executed in furtherance of or pursuant to this Agreement and/or Settlement may be used in any proceedings as may be necessary to effectuate or enforce the provisions of this Agreement. If this Agreement is approved by the Court and the Final Settlement Date is reached, any of the Parties or any of the Released Parties may file this Agreement and/or the Final Order and Judgment in any action that may be brought against such Party or Parties in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith estimate, judgment bar or preclusion, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim Any Settlement-related order(s) or judgments entered in this Action after the date of execution of this Agreement shall be deemed vacated, nunc pro tunc, and shall be without force or effect, and the Parties and the Settlement Class Members shall be returned to the status quo ante with respect to the Action as if they had never entered into this Agreement, and any of the Parties may move the Court to vacate and all orders entered by the Court pursuant to the provisions of this Agreement; No class will be certified pursuant to or in whole or in part because of this Agreement and, if previously the Settlement Class was certified, the Parties stipulate that such certification will be deemed to have been conditional and made only for purposes of this particular Agreement and for purposes of settlement only, and will therefore be immediately vacated and voided for all other purposes, without prejudice to or effect on subsequent motions for class certification on grounds wholly independent of this Agreement. In such event, Ocwen Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 56

57 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 57 of 70 and Ocwen s Counsel will not be deemed to have consented to (and will not be estopped to oppose) the certification of any class, and will retain all rights to object to or oppose any motion for class certification, including certification of the identical class provided for in this Agreement or any other class(es); The Released Parties expressly do not waive any, but instead affirmatively reserves, all of their defenses, arguments and motions as to all claims that have been or might later be asserted in the Action including, without limitation, the argument that the Action may not be litigated as a class action; and The Begleys and all other Settlement Class Members expressly reserve and do not waive any motions as to, and arguments in support of, all claims that have been or might later be asserted in the Action including, without limitation, any argument concerning class certification, liability and/or available remedies. 12. GENERAL MATTERS AND RESERVATIONS 12.1 The obligation of the Parties to implement and conclude the proposed Settlement is and shall be contingent upon each of the following: Entry by the Court of the Preliminary Approval Order, followed thereafter by the Fairness Hearing and subsequent entry by the Court of the Final Order and Judgment approving the Settlement, from which the time to appeal has expired or which has remained unmodified after the exhaustion and final disposition of any appeal(s) or petition(s) for appellate review; and Any other conditions stated in this Agreement The Parties: (a) acknowledge that it is their intent to consummate this Agreement; and (b) agree, subject to their fiduciary and other legal obligations, to cooperate to the extent Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 57

58 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 58 of 70 reasonably necessary to effectuate and implement all terms and conditions of this Agreement and to exercise their reasonable best efforts to accomplish the foregoing terms and conditions of this Agreement. The Parties, Class Counsel, and Ocwen s Counsel agree to cooperate with one another in (a) seeking Court approval of the Preliminary Approval Order, the Agreement, and the Final Order and Judgment and, in the event of any appeal(s), to use their reasonable best efforts to effect prompt consummation of this Agreement and the proposed Settlement; (b) promptly agreeing upon and executing all such other documents as may be reasonably required to obtain final approval of the Agreement; and (c) resolving any disputes that may arise in the implementation of the terms of this Agreement This Agreement reflects, among other things, the compromise and settlement of disputed claims among the Parties hereto, and neither this Agreement nor the releases given herein, nor any consideration therefore, nor any actions taken to carry out or obtain Court approval of this Agreement are intended to be, nor may they be deemed or construed to be, an admission or concession of liability, or the validity of any claim, or defense, or of any point of fact or law (including but not limited to matters respecting class certification) on the part of any Party. Ocwen expressly denies the allegations of the Begleys complaints including, without limitation, the allegations of the Operative Complaint. Neither this Agreement, nor the fact of the Settlement, nor the settlement proceedings, nor settlement negotiations, nor statements made in court proceedings, nor any related document, shall be used as an admission of any fault or omission by Ocwen, or be construed as, offered as, received as, or used as evidence of an admission, concession, presumption, or inference of any fact or of any liability or wrongdoing by Ocwen in any proceeding, or as a waiver by Ocwen of any applicable defense, or for any other purposes other than such proceedings as may be necessary to consummate, interpret, or enforce Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 58

59 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 59 of 70 this Agreement The Parties agree that the confidential information made available to them solely through the settlement process was made available, as agreed to, on the condition that the Parties may not disclose it to third parties (other than experts or consultants retained by them in connection with this case); that it shall not be the subject of public comment; that it shall not be used by the Parties for any purpose except as mutually agreed by both Parties; that it shall not be offered as evidence or admission or otherwise used in any way in this litigation should the Settlement not reach the Final Settlement Date; and that such confidential information is to be returned to the Party who furnished that information if the Settlement does not reach the Final Settlement Date; provided, however, that nothing contained herein shall prohibit the Parties from thereafter seeking similar information (other than documents created solely for purposes of mediation or statements made in mediation) through formal discovery or from referring to the existence of such information in connection with any efforts to seek the Court s approval of this Agreement and the Settlement Within one year after the Final Settlement Date (unless the time is extended by agreement of the Parties) and consistent with any applicable Rules of Professional Conduct, Class Counsel, and any expert or other consultant employed by them in such capacity, or any other individual provided by Ocwen with information marked as Confidential, shall upon written request of Ocwen either: (a) return to Ocwen s Counsel all such documents and materials (and all copies of which documents in whatever form made or maintained) and any and all handwritten notes summarizing, describing, or referring to such documents that is not attorney work product; or (b) certify to Ocwen s Counsel that all such documents and materials (and all copies of such documents in whatever form made or maintained) and any and all handwritten Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 59

60 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 60 of 70 notes summarizing, describing, or referring to such documents have been destroyed; provided, however, that this section shall not apply to any documents made part of the record in connection with any documents made part of a Court filing, nor to Class Counsel s work product Ocwen s execution of this Agreement shall not be construed to release and Ocwen expressly does not intend to release any claim Ocwen may have or make against any insurer, reinsurer, indemnitor, consultant, or vendor for any judgment, payment, liability, cost or expense incurred in connection with this Agreement, including, without limitation, for attorneys fees and costs Class Counsel represent that they: (a) are authorized by the Begleys to enter into this Agreement on the Begleys behalves; and (b) are seeking to protect the interests of the entire Settlement Class The Begleys represent and certify that they: (a) have entered into and executed this Agreement voluntarily and without duress or undue influence, and with and upon the advice of counsel, selected by them; (b) have agreed to serve as the representatives of the Settlement Class; (c) are willing, able, and ready to perform all of the duties and obligations of a representative of the Settlement Class; (d) have read the complaints filed in the Action, or have had the contents of such pleadings described to them by Class Counsel; (e) are familiar with the results of the fact-finding undertaken by Class Counsel; (f) have been kept apprised of the progress of the Action and the settlement negotiations between the Parties, and have either read this Agreement (including the exhibits annexed hereto) or have received a detailed description of it from Class Counsel and have agreed to its terms; (g) have consulted with Class Counsel about the Action, this Agreement and the duties and obligations imposed on a representative of the Settlement Class; (h) have authorized Class Counsel to execute this Agreement on their Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 60

61 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 61 of 70 behalves; and (i) will remain and serve as the representatives of the Settlement Class until the terms of the Agreement are effectuated, this Agreement is terminated in accordance with its terms, or the Court at any time determines that they can no longer serve in representative capacities on behalf of the Settlement Class The person(s) executing this Agreement on behalf of Ocwen represent that (s)he is authorized to enter into this Agreement on behalf of Ocwen This Agreement, complete with its exhibits, sets forth the sole and entire agreement and understanding of the Parties with respect to its subject matter, and it may not be altered, amended, or modified except by written instrument made in accordance with the provisions of this Agreement and executed by or on behalf of all Parties or their respective successors in interest. The Parties expressly acknowledge that no other agreements, arrangements, or understandings not expressed in this Agreement exist among or between them regarding the subject matter of this Agreement and that in deciding to enter into this Agreement, they each have relied solely upon their own judgment and knowledge. This Agreement supersedes any prior agreements, understandings, or undertakings (written or oral) by and between the Parties regarding the subject matter of this Agreement Any inconsistency between this Agreement and the attached exhibits will be resolved in favor of this Agreement To the extent not governed by federal law, this Agreement, any amendments thereto, and any claim, cause of action or dispute arising out of or relating to this Agreement shall be governed by, interpreted under, and enforced in accordance with the laws of the State of Florida Any disagreement and/or action seeking directly or indirectly to challenge, Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 61

62 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 62 of 70 modify, construe, obtain relief from, extend, limit, or enforce this Agreement shall be commenced and maintained only in the Court and in this Action, except that challenges to Account Adjustment determinations shall be commenced, maintained and resolved only before the Neutral, as provided in Section Without in any way compromising the finality of the Final Order and Judgment, the Court shall retain exclusive and continuing jurisdiction over all matters related in any way to the Settlement and the Agreement, including but not limited to the implementation of the Settlement and the interpretation, administration, supervision, enforcement and modification of this Agreement Whenever this Agreement requires or contemplates that one of the Parties shall or may give notice to the other, notice shall be provided by and/or next-day (excluding Saturdays, Sundays and Legal Holidays) express delivery service as follows: If to Ocwen, then to Michael R. Pennington, Bradley Arant Boult Cummings LLP, One Federal Place, 1819 Fifth Avenue North, Birmingham, Alabama (Telephone: (205) ; If to the Begleys or the Settlement Class or Class Counsel, then to Joseph H. Aughtman, Aughtman Law Firm, LLC, 1772 Platt Place, Montgomery, Alabama (Telephone: (334) ; All time periods set forth herein shall be computed in calendar days unless otherwise expressly provided. In computing any period of time prescribed or allowed by this Agreement or by order of the Court, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday or a Legal Holiday (as defined in Rule 6(a)(6) of the Federal Rules of Civil Procedure), or, when the act to be done is the filing of Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 62

63 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 63 of 70 a paper in court, a day on which weather or other conditions have made the office of the clerk of the court inaccessible, in which event the period shall run until the end of the next day that is not one of the aforementioned days The time periods and dates described in this Agreement are subject to the Court s approval. These time periods and dates may be changed by the Court or by the Parties written agreement without notice to the Settlement Class. The Parties reserve the right, subject to the Court s approval, to agree to any reasonable extensions of time that might be necessary to carry out any of the provisions of this Agreement Neither the Settlement Class, the Begleys, Class Counsel, Ocwen nor Ocwen s Counsel shall be deemed to be the drafter of this Agreement or of any particular provision, nor shall any of them argue that any particular provision should be construed against its drafter or otherwise resort to the contra proferentem canon of construction. All Parties agree that this Agreement was drafted by counsel for the Parties during and through extensive arm s length negotiations with the aid of a neutral mediator. No parole or other evidence may be offered to explain, construe, contradict, or clarify this Agreement s terms, the intent of the Parties or their counsel, or the circumstances under which this Agreement was made or executed The Parties expressly acknowledge and agree that this Agreement and its exhibits, along with all related drafts, motions, pleadings, conversations, negotiations, and correspondence, constitute an offer of compromise and a compromise within the meaning of Federal Rule of Evidence 408 and any equivalent rule of evidence in any state. In no event shall this Agreement, any of its provisions or any negotiations, statements or court proceedings relating to its provisions, or any documents created for the purposes of mediation, negotiation, or confirmatory due diligence or informal discovery, whether or not exchanged with opposing Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 63

64 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 64 of 70 counsel, in any way be construed as, offered as, received as, used as, or deemed to be evidence of any kind in the Action, any other action, or in any judicial, administrative, regulatory or other proceeding, except in a proceeding to effectuate or enforce this Agreement or the rights of the Parties or their counsel. Without limiting the foregoing, neither this Agreement nor any related negotiations, statements, or court proceedings shall be construed as, offered as, received as, used as or deemed to be evidence of an admission or concession of any proposition of fact or law or of any liability or wrongdoing whatsoever on the part of any person or entity, including, but not limited to, the Released Parties, the Begleys or the Settlement Class or as a waiver by the Released Parties, the Begleys or the Settlement Class of any applicable privileges or immunities (including, without limitation, the attorney-client privilege or work product immunity), claims or defenses The waiver by one of the Parties of any breach of this Agreement by another of the Parties shall not be deemed a waiver of any other prior or subsequent breaches of this Agreement If one Party to this Agreement considers the other Party to be in breach of its obligations under this Agreement, that Party must provide the breaching Party with written notice of the alleged breach and provide a reasonable opportunity to cure the breach before taking any action to enforce any rights under this Agreement No opinion concerning the tax consequences, if any, of this Agreement and Settlement as to individual Settlement Class Members or anyone else is being given or will be given by Ocwen, Ocwen s Counsel, the Begleys or Class Counsel; nor is any representation or warranty in this regard made by virtue of this Agreement or Settlement. The Paid-Off Class Notice and Active/Transfer Class Notice will direct Settlement Class Members to consult their Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 64

65 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 65 of 70 own tax advisor(s) regarding the tax consequences of the Settlement and this Agreement, and any tax reporting obligations they may have with respect thereto. Each Settlement Class Member s tax obligations, and the determination thereof, are the sole responsibility of the Settlement Class Member, and it is understood that the tax consequences may vary depending on the particular circumstances of each individual Settlement Class Member. Nothing in this Agreement, or in the Paid-Off Class Notice, or in the Active/Transfer Class Notice is to be construed as tax advice of any kind Headings contained in this Agreement are used for the purpose of convenience only and are not intended to alter or vary the construction and meaning of this Agreement The recitals of this Agreement are incorporated by this reference and are part of this Agreement This Agreement shall be equally binding upon and inure to the benefit of the Begleys and the Settlement Class Members, their representatives, heirs, successors and assigns, as upon and to the benefit of Ocwen Nothing herein shall be deemed a waiver of any prior release individually executed between Ocwen and any Settlement Class Member This Agreement may be signed with a facsimile or PDF format signature and in counterparts, each of which shall constitute a duplicate original. [THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.] Stipulation of Settlement and Release (Case No. 3:16-cv MCR-CJK) pg. 65

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69 Case 3:16-cv MCR-CJK Document 46-2 Filed 05/12/17 Page 69 of 70 APPROVED AS TO FORM BY COUNSEL: Dated: May, 2017 AUGHTMAN LAW FIRM, LLC Attorneys for the Begleys and the Settlement Class Joseph "Jay" H. Aughtman Dated: May, 2017 AYLSTOCK, WITKIN, KREIS & 4VERHOLTZ, PLLC Attorneys for the Begleys and the Settlement Class By: Bryan F. Aylstock Dated: May ~, 2017 Go1.o~vts & HoMx, P.C. Attorneys for the Begleys and the Settlement Class By: Ric and M. Golomb Kenneth J. Grunfeld Dated: May ~, 2017 HEMMINGS & STEV~NS, PLLC Attorneys for the Begleys and the Settlement Class Aaron C. Hemmings.. ~.,,'~ Dated: May, 2017 BRADLEY ARANT BOULT CUNNINGS LLP Attorneys for Ocwen Loan Servicing, LLC Michael R. Pennington Robert J. Campbell Michael B. Colgan Brian Wahl Stipulation of Settlement and Release (Case No.3:16-cv MCR-CJK) pg. 67

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71 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 1 of 11 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA A class action settlement may affect your rights IF you previously had a home loan that was serviced by Ocwen while you were enrolled in a weekly or bi-weekly payment program sponsored by ACI Worldwide, Inc. A federal court authorized this notice. This is not a solicitation from a lawyer. A class action settlement (the Settlement ) has been preliminarily approved in Begley v. Ocwen Loan Servicing, LLC, case number 3:16-cv-149-MCR-CJK, pending in the United States District Court for the Northern District of Florida (the Action ). Plaintiffs John and Carrie Begley ( Plaintiffs ) and defendant Ocwen Loan Servicing, LLC ( Ocwen ) are the Parties, and together they have proposed the Settlement. If final approval is entered by the Court, the Settlement offers relief to and will affect the rights of all members of the Settlement Class. If this Notice was addressed to you then, according to Ocwen s records, you are a member of the Settlement Class. This Notice provides you with a summary of the claims made in the Action and the terms of the Settlement, and also describes your legal rights and options. Capitalized terms used in this document are explained below and defined in the full Settlement, titled Stipulation of Settlement and Release, which is available for review at a website established to provide you more detailed information about the Settlement. Please read this notice carefully because your legal rights may be affected whether you act or don t act. YOUR LEGAL OPTIONS & RIGHTS IN THIS SETTLEMENT EXCLUDE YOURSELF OBJECT GO TO THE FAIRNESS HEARING SUBMIT A CLAIM FORM If you exclude yourself you will receive nothing from the Settlement, but you will not be bound by it and you will not be part of the Settlement Class. This is the only choice that will allow you to keep your right to sue Ocwen on your own about the claims in the Action. Section 13 explains what you need to do to exclude yourself, and the deadline for doing so. You may write to the Court about any objections you have to the Settlement. However, persons who exclude themselves from the Settlement Class cannot object. Section 18 explains what you need to do to object, and the deadline for doing so. As explained in Section 20, the Court has set a Fairness Hearing for MONTH DAY, 2017, beginning at XX:XX p.m., to consider final approval of the Settlement. If you file a written objection to the Settlement, Section 22 explains how you may ask the Court to speak at the Fairness Hearing about your objection. Persons who exclude themselves from the Settlement Class cannot speak at the Fairness Hearing. If you have a loan that is still being serviced by Ocwen, or was transferred to another company for loan servicing, and you feel a payment you made to Ocwen was incorrectly applied, you may file a claim to determine if you qualify for an Account Adjustment. The only way to get an Account Adjustment on such loans (if one is due) is to file a timely and complete Claim Form. As explained in Sections 2 and 6, however, not all Settlement Class Members will be entitled to an Account Adjustment. Section 7 explains how to submit a Claim Form and the deadline for doing so. Questions? Call , or visit Page 1

72 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 2 of 11 DO NOTHING If you do nothing and the Settlement is given final approval by the Court, you will remain a member of the Settlement Class and be bound by any Orders the Court may enter. However, if you have a loan that is still being serviced by Ocwen, or was transferred to another company for loan servicing, you must submit a Claim Form if you want to see if you are eligible for an Account Adjustment on that loan. These rights and options and the deadlines to exercise them are explained in this Notice. The Court still has to decide whether to give final approval to the Settlement. Settlement relief will only be provided if the Court finally approves the Settlement and after any appeals are resolved. Please be patient as the settlement process will take several months. 1. Why did I get this notice? BASIC INFORMATION If this Notice was addressed to you, then according to Ocwen s records you have or previously had a home loan that was serviced for some period of time by Ocwen on its REALServicing system while you were enrolled in a weekly or bi-weekly payment program sponsored by ACI Worldwide, Inc. ( ACI ). The Court sent you this Notice because you have a right to know about a proposed Settlement of this Action, and your options under that Settlement. This Notice describes the lawsuit, the Settlement, your legal rights, what relief is being offered to you, how that relief will be distributed and other important information. This Notice only summarizes the full Settlement, which is available for review at If there is any conflict between this Notice and the Settlement, the Settlement governs. You should review the Settlement before deciding what to do. Please share this Notice with any co-borrower(s) on your loan(s). 2. What is this lawsuit about? The Plaintiffs allege that Ocwen failed to properly credit certain weekly and bi-weekly mortgage payments made by borrowers under weekly and bi-weekly payment plans offered and administered by ACI Worldwide, Inc., a company that is not part of Ocwen. Under these plans, ACI would collect payments from borrowers and remit them to Ocwen. The payments at issue are weekly and bi-weekly payments made through ACI while a loan was being serviced by Ocwen on the REALServicing loan servicing platform (the ACI Loans ). Under an ACI weekly payment plan, a borrower was expected to pay ¼ of his or her monthly payment each week. In four months out of the year, 5 weekly payments would be made in a given month instead of 4. Similarly, under an ACI bi-weekly payment plan, a borrower was expected to pay ½ of his or her monthly payment every other week, and in 2 months out of the year, 3 bi-weekly payments would be made in a given month instead of 2. The 5th weekly payment made in a single month under an ACI weekly plan, and the 3rd ACI bi-weekly payment under an ACI bi-weekly plan, are called ACI Extra Payments for purposes of the Settlement. If the borrower made all ACI payments on schedule and no other unpaid fees, charges, or escrow deficiencies existed under the ACI Loan, then these ACI Extra Payments were supposed to be applied to reduce the borrower s loan principal balance. This would reduce the amount on which interest would be calculated for the remaining term of the ACI Loan. Over time, if all ACI payments were consistently made as and when scheduled, these ACI plans would significantly reduce the total interest the borrower would pay over the life of the loan and allow the borrower to pay the loan off sooner than if the borrower simply paid his or her regular payment once each month. Plaintiffs allege that the REALServicing loan servicing system used by Ocwen was not fully compatible with the ACI weekly and bi-weekly payment plans, such that even when all ACI payments were made as and when scheduled, ACI Extra Payments were placed first into a suspense account and then eventually applied towards future monthly payments not yet due on the ACI Loan instead of applying those ACI Extra Payments immediately to reduce the ACI Loan s principal balance (the alleged Extra Payment Processing Issue ). While this payment application would still have allowed a borrower to pay off his or her ACI Loan earlier than making only the scheduled contractual payments, Plaintiffs claim that the alleged Extra Payment Processing Issue prevented ACI Questions? Call , or visit Page 2

73 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 3 of 11 Loans from paying off as quickly as contemplated by the ACI weekly and bi-weekly payment plans, and resulted in more interest being paid by the borrower than intended by the ACI weekly and bi-weekly plans. Therefore, Plaintiffs filed a lawsuit seeking injunctive relief and damages for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, negligence, and violation of the Florida Deceptive and Unfair Trade Practices Act. Ocwen denies Plaintiffs claims of wrongdoing or liability against it, and among other things asserts that if any ACI Extra Payment misapplications occurred, they were the result of bona fide errors, and that monthly statements sent to the borrower showed how payments were applied and gave borrowers the opportunity to contact Ocwen if they did not agree with those payment applications. Ocwen contends that even if REALServicing did initially misapply some ACI Extra Payments, many would have been corrected manually thereafter, in response to customer inquiry or pursuant to Ocwen s own actions. Ocwen further claims that the terms of loan documents executed by persons included within the Settlement Class generally provide that borrowers should expressly indicate in writing when they intend extra payments to be applied as payments of principal, which Ocwen contends did not happen with respect to some or all of the payments at issue in this case. Section 24 explains how you may obtain more information about Plaintiffs claims in this Action and Ocwen s response to those claims. You can also visit to review Plaintiffs operative complaint and the Settlement Agreement. 3. Why is this lawsuit a class action? In a class action, one or more people, called class representatives (here Plaintiffs Robert and Carrie Begley), sue on behalf of all other people who have similar claims. Together, all of these people are called a class, and the persons in it are called class members. In a class action, one court resolves the claims of all class members, except for those who ask in writing to be excluded from the class. The Honorable Margaret Catharine Rogers of the United States District Court for the Northern District of Florida is in charge of all aspects of this case, and has already given preliminarily approval to the Settlement. Nevertheless, because the Settlement will determine the rights of the Settlement Class, all of the Settlement Class Members must be sent Notice before the Court can consider entering final approval of the Settlement and making it effective. The Court has conditionally certified the Settlement Class for settlement purposes only. If the Settlement is not given final approval, or fails to reach the Final Settlement Date, or is terminated by the Parties for any of the reasons set forth in Section 11 of the Settlement Agreement, the Settlement will become void, the Settlement Class will no longer remain certified, and the Action will proceed as if there had been no Settlement and no certification of the Settlement Class. 4. Why is there a Settlement? The Court has not decided whether Plaintiffs or Ocwen should win this case. Instead, both sides agreed to the Settlement before any judgment was entered in the case in order to avoid the uncertainties and expenses of ongoing litigation, and the delays of a trial and possible appeals, while providing Settlement Class Members with definite benefits now rather than, if at all, years from now. Plaintiffs and their attorneys ( Class Counsel ) believe the Settlement is in the best interests of the Settlement Class because it offers such relief now, while at the same time allowing anyone who wishes to pursue their own individual claims against Ocwen to exclude themselves from the Settlement Class. WHO IS IN THE SETTLEMENT 5. How do I know if I am part of the Settlement? The Court decided that everyone who fits the following description is a member of the Settlement Class: Questions? Call , or visit Page 3

74 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 4 of 11 All persons who were borrowers on home mortgage loans on which any payments were made to Ocwen under a weekly or biweekly accelerated payoff program administered by ACI while those loans were being serviced by Ocwen on the REALServicing loan servicing platform. Excluded from the Settlement Class are: (a) Ocwen s board members and executive level officers; (b) persons who timely and properly exclude themselves from the Settlement Class as provided in this Agreement; (c) persons who, as of the date of entry of the Preliminary Approval Order, are in active bankruptcy proceedings; and (d) all federal judges, their spouses, and persons within the third degree of relationship to them. As noted on page 1, if this Notice was addressed to you, then according to Ocwen s records, you are a member of the Settlement Class. 6. What relief does the Settlement provide? WHAT YOU CAN GET UNDER THE SETTLEMENT The Settlement offers a 100% accounting remedy to Settlement Class Members to make sure all of the payments they made under an ACI weekly or ACI bi-weekly plan were properly applied while their ACI Loans were being serviced by Ocwen on the REALServicing system, and to correct any misapplications that occurred during that time. This process will correct any economic impact to Settlement Class Members ACI Loans from any previously uncorrected misapplication of any payments caused by the alleged Extra Payment Processing Issue. Correction of any payment misapplications can have a favorable impact on your loan. According to Ocwen s records, you were a borrower on an ACI Loan with an Active Status or Transferred Status, meaning that your ACI Loan is still being serviced by Ocwen today, or was transferred to another company for servicing after the events at issue occurred. As explained in Section 7, you may submit a Claim Form to have the payment history of your ACI Loan reviewed pursuant to the Audit and Remediation Protocol established under the Settlement. Through that process, any payments that were not applied correctly while your ACI Loan was enrolled in an ACI weekly or ACI bi-weekly payment plan and was being serviced by Ocwen on REALServicing will be reversed and reapplied correctly, as of the date each such payment was originally made. Any differences between your ACI Loan s currently-reported and re-calculated unpaid principal balances, as well as the currentlyreported and recalculated next due dates, will be your ACI Loan s Account Adjustment. The Account Adjustment will be reported to you, but no changes will be made to your ACI Loan unless you then accept that Account Adjustment as explained in Section 8. The alleged Extra Payment Processing Issue would potentially impact the processing of only some not all borrowers ACI Extra Payments. Which ACI Extra Payments might have been affected, and the nature and amount of any Account Adjustment that would be available as a result, depends upon a variety of factors, including your actual payment history, the length of time you were enrolled in and compliant with an ACI weekly or bi-weekly payment plan, the number of ACI Extra Payments you made on your ACI Loan while it was being serviced on REALServicing, the status of your ACI Loan at the time each of your ACI Extra Payments were made, and if your ACI Loan has a Transferred Status, the cooperation of your transferee servicer(s). Therefore, it is impossible to estimate in advance whether you will be entitled to any Account Adjustment, or what amount of Account Adjustment relief you may be entitled to receive. However, if your ACI Loan is due an Account Adjustment, that Account Adjustment will likely reduce the outstanding principal balance of your loan and therefore reduce the amount on which interest will be charged in the future; reduce the total amount of interest paid on your loan to date; and make your next contractual monthly payment due sooner than is currently reflected on your monthly account statement all as a result of the reversal and reapplication to principal reduction of any misapplied ACI Extra Payments. If you did not make all payments contemplated by your ACI weekly or bi-weekly payment plan, or if you missed or chose to skip payments at any time since February 1, 2013, accepting the Account Adjustment may require you to make up those missed payments in order to avoid future late fees. However, any such late fees resulting from Account Adjustments will be waived for each of the first two months following the borrower s acceptance of an Account Adjustment to allow time for a borrower to make up any resulting delinquency. 7. How can I get such relief? Questions? Call , or visit Page 4

75 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 5 of 11 Settlement Class Members who exclude themselves from the Settlement Class are not entitled to receive Account Adjustments. If you do not exclude yourself from the Settlement Class and want to see if you qualify for an Account Adjustment, you must submit a Claim Form. A Claim Form is enclosed with this Notice, and can also be obtained by calling or by visiting Read the instructions carefully, fill out the Claim Form, include all information the form asks for, personally sign it, and mail it sufficiently in advance to ensure that it is received by the Settlement Administrator by the Claim Form Deadline of MONTH DAY, Incomplete Claim Forms, or Claim Forms received after this deadline, will be considered invalid and a release and waiver of any right by a Claimant to claim an Account Adjustment under the Settlement. Please note that each ACI Loan that qualifies for an Account Adjustment will be entitled to only one Account Adjustment. Co-debtors, joint-debtors and multiple borrowers on a single ACI Loan are not each entitled to receive separate Account Adjustments on the same ACI Loan. Also, if you have other ACI Loans that were serviced by Ocwen that have a Paid-Off Status (meaning the loan was paid-off, refinanced, terminated and cancelled or charged off during the time the loan was being serviced by Ocwen) on or before April 26, 2017, different procedures for obtaining Account Adjustment relief apply. If Ocwen s records indicate that you also have an ACI Loan with a Paid-Off Status, you will be sent a separate notice explaining how Account Adjustment relief will be distributed with respect to such loans. 8. When would I get such relief and how will it be distributed to me? The Court will hold a hearing on MONTH DAY, 2017 to decide whether to grant final approval to the Settlement. The Court must finally approve the Settlement before any relief will be distributed, and will only do so if it finds that the Settlement is fair, reasonable and adequate. In addition, any final approval order the Court may enter may be subject to appeals. If there are any such appeals, resolving them takes time sometimes more than a year. Finally, there remains a possibility that this Settlement may be terminated for other reasons, such as those set forth in Section 11 of the Settlement Agreement itself (which is available for review at Please be patient. If the Settlement is given final approval and/or after any appeals have been resolved in favor of the Settlement, Claim Forms will be processed within two hundred and seventy (270) days following the Final Settlement Date. If you do not exclude yourself from the Settlement Class and you submit a timely and complete Claim Form, the Settlement Administrator will mail you a Determination Notice following the processing of your Claim Form, notifying you of any Account Adjustment determined to be due you. You will then have twenty-five (25) days from the date of mailing of the Determination Notice to either accept or challenge the proposed Account Adjustment pursuant to the instructions that will be contained in the Determination Notice, or decline the Account Adjustment by doing nothing in response to the Determination Notice. A Settlement Class Member s failure to either timely accept or challenge the Settlement Administrator s Account Adjustment determinations reflected in the Determination Notice shall constitute a release and waiver of any rights to claim an Account Adjustment under the Settlement. To accept the Account Adjustment determinations, the Determination Notice will instruct a Claimant to sign, date and return the Acceptance Form that will be attached to the Determination Notice within twenty-five (25) days from the date of mailing of the Determination Notice. The Account Adjustments set forth in the Determination Notice will then be implemented and made effective within forty-five (45) days of receipt of the Claimant s signed and timely Acceptance Form. To challenge the Settlement Administrator s Account Adjustment determinations, a Claimant must follow the steps described in Section 9 below, which will also be explained in the Determination Notice. How Account Adjustments will be paid out to you depends on the status of your ACI Loan on the Final Settlement Date and, if applicable, the cooperation of your transferee servicer(s) in the processing of your Claim Form. If Ocwen is still servicing your ACI Loan on the Final Settlement Date, any Account Adjustment due you will be provided to you in the form of a credit against your outstanding loan balance or other adjustment of your loan account to reflect accurate application of any misapplied funds. If your ACI Loan has a Transferred Status, and each Questions? Call , or visit Page 5

76 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 6 of 11 of your transferee servicers cooperate in the Claims Process, any Account Adjustment due you will also be distributed in the form a credit against your outstanding loan balance. However, if you have a ACI Loan with a Transferred Status and any of your transferee servicers do not cooperate in the calculation and implementation of an Account Adjustment, your Determination Notice will so state and your Account Adjustment will be paid to you by check, calculated as if your ACI Loan had been paid-off on the actual date of servicing transfer from Ocwen. Also, if your ACI Loan has a Paid-Off Status (meaning that it was paid off, charged off, refinanced or terminated and cancelled) as of the date of processing of your Claim Form, your Determination Notice will so state and your Account Adjustment will be paid to you by check. Checks will be made payable jointly to all Settlement Class Members identified in Ocwen s records as borrowers on the relevant ACI Loan, and the check will be mailed to the primary borrower on that ACI Loan as determined from Ocwen s records. NOTE: All checks will expire and become void 120 days after they are issued, and be considered unclaimed funds. Unclaimed funds will be considered a waiver by you of the right to receive such relief, and will be paid to Homes for Our Troops, a privately funded 501(c)(3) nonprofit organization that builds homes for U.S. veterans. 9. If I disagree with the Account Adjustment (if any) given me, what do I do? If you do not exclude yourself from the Settlement Class and you submit a timely and complete Claim Form, a Determination Notice will be provided to you following the processing of your Claim Form explaining any Account Adjustment(s) determined to be due you. If you do not agree with the Account Adjustment(s), you can dispute that determination by submitting a written notice of appeal in response to your Determination Notice. Any such written notice of appeal must be submitted to the Settlement Administrator no later than twenty-five (25) days from the date of mailing of the Settlement Administrator s Determination Notice to you. Notices of appeal can be submitted by facsimile to FAX NUMBER, or by addressed to ADDRESS, or by regular mail addressed to Begley v. Ocwen Loan Servicing, LLC, c/o Class-Settlement.com, P.O. Box 9009, Hicksville, NY Your written notice of appeal must: (a) include your name, mailing and address and contact telephone number, and loan number(s); and (b) set forth the specific reasons you believe you are due a different amount as an Account Adjustment under the terms of the Settlement, including all legal and factual evidence you wish to introduce in support of your challenge. Your failure to timely submit such a written notice of appeal shall constitute a release and waiver of any rights to challenge the validity of the proposed Account Adjustments (if any) for your ACI Loan(s). Your appeal will then be resolved by Phillip E. Adams, Jr., of the National Academy of Distinguished Neutrals, without a hearing, and his decision shall be in writing and shall be final, binding and non-appealable by you or the Parties. Any fees or costs payable to Mr. Adams for resolving your dispute shall be borne by Ocwen; however, no other costs or fees associated with the resolution of your appeal, other than the fees and expenses of Mr. Adams himself, shall be borne by Ocwen. The full details regarding this process are set forth in Section of the Settlement, available at Will the Settlement have any tax consequences on me? Neither the Court nor the Parties (including their counsel) can advise you about what, if any, tax consequences might arise for you from the Settlement. You are encouraged to consult with your own tax advisor to determine whether any potential tax consequences could arise from your receipt of the relief the Settlement offers. 11. Am I giving anything up by remaining in the Settlement Class? Unless you exclude yourself, you will remain in the Settlement Class, and that means that if the Settlement is given final approval and reaches the Final Settlement Date then you will be releasing claims, as follows: In consideration for the Settlement benefits described in this Agreement, the Begleys and the other members of the Settlement Class who do not timely and validly request to be excluded from the Settlement, on behalf of themselves and all of their present, former and future heirs, guardians, assigns, executors, administrators, representatives, agents, attorneys, partners, legatees, predecessors, and/or successors, will, by virtue of this Agreement and by virtue of the Court s Final Order and Judgment, (1) be deemed to have fully, finally and forever released, remised, relinquished, acquitted, and forever discharged, each and all of the Released Parties of and from, and shall be permanently enjoined Questions? Call , or visit Page 6

77 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 7 of 11 from pursuing, any and all actual, potential, filed or unfiled, known or unknown, fixed or contingent, suspected or unsuspected, claims, demands, liabilities, damages (including but not limited to punitive, exemplary, multiple or statutory damages), charges, penalties, losses, rights, actions, causes of action, expenses, costs, attorneys fees, suits, judgments or other avenues of relief, whether arising at law, in equity, by regulation, or otherwise, whether direct, individual or representative, and whether or not previously asserted, mature or not yet mature, known or unknown, suspected or unsuspected, contingent or non-contingent; whether assertable in the form of a cause of action or as a private motion, petition for relief or claim for contempt, or otherwise, and in any court, tribunal, arbitration panel, commission, agency, or before any governmental and/or administrative body, or any other adjudicatory body, and whether based on federal, state, local, statutory or common law or any other law, rule, regulation, ordinance, code, contract, common law, or any other source, including the law of any jurisdiction outside the United States (including both direct and derivative claims) against the Released Parties, or any of them, arising or resulting in whole or in part from any applications or misapplications of any payments made to Ocwen on any ACI Loan while the loan was being serviced by Ocwen on the REALServicing loan servicing platform, or resulting in whole or in part from any loan information contained in any written statements or notices sent to the borrower or anyone else concerning an ACI Loan as a result of those payment applications or misapplications, including but not limited to the claims made in the Operative Complaint; and (2) be deemed to have fully, finally and forever ratified Ocwen s application of all payments made on an ACI Loan on or before the date of entry of the Court s Final Order and Judgment while the ACI Loan was being serviced on REALServicing, as modified by any Account Adjustments that are awarded pursuant to the terms of this Settlement. The Released Parties are further specifically released from any and all liability arising directly or indirectly or in whole or in part from, or relating in any way to Ocwen s application or misapplication of payments made by a Settlement Class Member under one of the ACI Worldwide, Inc. weekly or bi-weekly accelerated payoff programs while his or her loan was being serviced by Ocwen on the REALServicing loan servicing platform, and from any claims arising in whole or in part from the termination of the ACI programs. However, nothing herein will release any claim that, any fee, late fee, escrow or insurance charge was improperly assessed, charged or imposed on any individual ACI Loan for reasons entirely unrelated to the Extra Payment Processing Issue. This release will include claims that Settlement Class Members do not know or suspect to exist in their favor at the time final approval may be granted to the Settlement, if those claims arise from, are based on, or relate to the Released Claims. If the Settlement is given final approval and reaches the Final Settlement Date, all Settlement Class Members will be deemed to have knowingly and voluntarily waived, relinquished and released the protections of any laws that would limit this release, including, without limitation, Section 1542 of the California Civil Code, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The phrase Released Parties means and refers to: Ocwen and any and all of its current or former predecessors, successors, assigns, parent corporations, subsidiaries, divisions, related and affiliated companies and entities, associates, vendors, service providers, software licensors and licensees, clients and customers, principals, stockholders, directors, officers, partners, principals, members, employees, attorneys, consultants, independent contractors, representatives and agents, transferee servicers, and all individuals or entities acting by, through, under or in concert with any of them. The full terms of the Release are set forth in Section 8 of the Settlement Agreement, which is available for review at Does the Settlement have any current effect on Settlement Class Members? The Court has issued a preliminary injunction against the Settlement Class Members, barring the initiation of any new, or the continued prosecution of any existing, lawsuit(s) against Ocwen based on or relating to the Released Claims, pending a decision by the Court on whether to grant final approval to the Settlement. The relevant text of Questions? Call , or visit Page 7

78 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 8 of 11 the Court s preliminary injunction, reproduced from the Court s order granting preliminary approval to the Settlement, is as follows: Accordingly, in order to preserve the Court s jurisdiction pending consideration of whether final approval should be given to the Agreement, and to avoid irreparable harm to the settlement process, and after balancing the equities and concluding that the Agreement is sufficiently fair, reasonable and adequate that it is due to be preliminarily approved and should be protected from collateral attack during the notice and final approval process, the Court hereby preliminarily bars and enjoins all Settlement Class Members from: (a) instituting, maintaining, prosecuting, intervening in, participating as a party or class member in, or otherwise pursuing or receiving any benefits from any other action other than this Action asserting any claims that would be Released Claims under the terms of the Settlement, unless they first exclude themselves from the Settlement Class in accordance with the terms of this Order; and (b) from filing, commencing, maintaining, or prosecuting any lawsuit asserting claims within the scope of the proposed Release set forth in the Settlement as a class action, as a separate class, or as a representative action for purposes of pursuing (including by seeking to amend a pending complaint to include class allegations or by seeking class certification in a pending action in any jurisdiction) on behalf of any other Settlement Class Members any of the claims within the scope of the proposed Release contained in the Settlement, whether or not they have excluded themselves from the Settlement Class. A complete copy of the Court s order of preliminary approval is available at and the terms of the Release are described in Section 11 above. EXCLUDING YOURSELF FROM THE SETTLEMENT 13. How do I exclude myself from the Settlement Class? If you don t want to be part of the Settlement, or if you want to keep the right to sue or continue suing Ocwen on your own about the Released Claims, then you must take steps to exclude yourself from the Settlement Class. This is called excluding yourself, or opting out. If you exclude yourself from the Settlement Class, you will not be bound by the Settlement and will not receive any relief offered by the Settlement, but you will be free to pursue your own individual lawsuit regarding the Released Claims if you wish to do so. However, the Court has ruled that neither the Settlement, nor this Notice, nor the Court s preliminary approval order may be used as evidence in such individual lawsuits. To exclude yourself, you must mail a letter sufficiently in advance to be received by the Settlement Administrator no later than MONTH DAY, 2017, saying that you want to be excluded from the Settlement Class. Your letter must be addressed to Begley v. Ocwen Loan Servicing, LLC, c/o Class-Settlement.com, P.O. Box 9009, Hicksville, NY , and must: (a) contain a caption or title that identifies it as Request for Exclusion in Begley v. Ocwen Loan Servicing, LLC (case number 3:16-cv-149-MCR-CJK); (b) include your name, mailing and addresses, and contact telephone number; (c) specify that you want to be excluded from the Settlement Class and identify the loan number(s) for which you seek exclusion from the Settlement; and (d) be personally signed by you. NOTE: If your request for exclusion is late or incomplete, it will not be valid and you will remain part of the Settlement Class, you will still be bound by the Settlement and all other orders and judgments in this case, and you will not be able to participate in any other lawsuits against Ocwen and the Released Parties based on the Released Claims. If you submit a request for exclusion, it will be deemed as a request for exclusion by you and any other codebtors, joint-debtors and multiple borrowers on your ACI Loan(s). 14. If I don t exclude myself, can I sue Ocwen later for the same thing? No. If you do not exclude yourself from the Settlement Class and the Settlement is given final approval and reaches the Final Settlement Date, you will give up the right to sue Ocwen and the Released Parties for the Released Claims. 15. If I exclude myself, can I get anything from this Settlement? Questions? Call , or visit Page 8

79 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 9 of 11 No. If you exclude yourself, you will not be eligible to receive any of the benefits the Settlement offers. 16. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU Yes, the Court has appointed Bryan F. Aylstock of the law firm of Aylstock, Witkin, Kries & Overholtz, PLLC, Richard M. Golomb and Kenneth J. Grunfeld of the law firm of Golomb & Honick, PC, Joseph H. Aughtman of the Aughtman Law Firm, LLC, and Aaron C. Hemmings of the law firm of Hemmings & Stevens, PLLC to represent you and the other Settlement Class Members in this Action and for purposes of this Settlement, and for no other purpose. These attorneys are called Class Counsel. You will not be separately charged for the services of Class Counsel. You have the right to retain your own separate lawyer to represent you in this case, but you are not obligated to do so. If you do hire your own lawyer, you will be solely responsible for all of his or her fees and expenses. You also have the right to represent yourself before the Court without a lawyer, but if you want to appear at the Fairness Hearing you must comply with the procedures set forth in Section 22 below. 17. How will Class Counsel Be Paid? Class Counsel have prosecuted this case on a contingent-fee basis and so far have not yet been paid anything for their services. If the Settlement is approved, Class Counsel will ask the Court for Attorneys Fees and Expenses of up to $2,000,000 to be paid separately and in addition to the Account Adjustment relief offered to the Settlement Class. Class Counsel will also request a Service Award for the Plaintiffs of up to $5,000 payable to them jointly for their services as class representatives and their efforts in bringing the Action, to also be paid separately and in addition to the Account Adjustment relief offered to the Settlement Class. Class Counsel will file with the Court and post on their request for Attorneys Fees and Expenses and a Service Award on or before MONTH DAY, The Settlement, however, is not conditioned on the Court approving any specific amount of Attorneys Fees and Expenses or Service Award. The Court will ultimately determine whether any Attorneys Fees and Expenses should be awarded Class Counsel or any Service Award awarded to the Plaintiffs, and in what amounts. The Court may approve the Settlement while awarding less than the amounts requested by Class Counsel and Plaintiffs. OBJECTING TO THE SETTLEMENT 18. How do I tell the Court that I don t like the Settlement? If you do not exclude yourself from the Settlement Class, you can object to the Settlement if you don t agree with any part of it. You can provide reasons why you think the Court should deny approval of the Settlement by filing an objection. However, you can t ask the Court to order a larger or different type of settlement as the Court can only approve or deny the Settlement presented by the Parties. If the Court denies approval, no settlement relief will be available to the Settlement Class Members and the lawsuit will continue. If you file a written objection, the Court will consider your views. To object, you must file a written statement of objection with the Court. Your written objection must: (a) include a caption or title that identifies it as Objection to Class Settlement in Begley v. Ocwen Loan Servicing, LLC (case number 3:16-cv-149-MCR-CJK); (b) include your name, mailing and addresses, contact telephone number, and your loan number(s); (c) set forth the specific reason(s), if any, for each of your objections, including all legal support you wish to bring to the Court s attention and all factual evidence you wish to introduce in support of your objection; (d) disclose the name and contact information of any and all attorneys representing, advising, or in any way assisting you in connection with the preparation or submission of your objection and (e) be personally signed by you. Questions? Call , or visit Page 9

80 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 10 of 11 You may file your written statement of objection in person at any location of the United States District Court for the Northern District of Florida, or you may mail it postmarked to the Clerk of the Court, United States District Court for the Northern District of Florida, Winston E. Arnow Federal Building, 100 North Palafox Street, Pensacola, Florida However, if you are represented by your own attorney, your attorney must file your objection through the Court s Case Management/Electronic Case Filing (CM/ECF) system. To be considered timely and valid, all written statements of objection must be filed with the Court by, or mailed sufficiently in advance to be received by the Court by, MONTH DAY, Any Settlement Class Member who does not comply with the above deadline and requirements shall be deemed to have waived all objections to and shall be forever barred from challenging the Settlement. 19. What s the difference between objecting and excluding myself? Objecting simply means telling the Court that you don t agree with something about the Settlement, but that you are still willing to be bound by it if the Settlement is finally approved despite your objection. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you don t want to be part of the Settlement Class at all. If you exclude yourself, you will not be subject to the Settlement and therefore cannot object to the Settlement or appear at the Fairness Hearing because the case will no longer affect you. THE COURT S FAIRNESS HEARING 20. When and where will the Court decide whether to approve the Settlement? A Fairness Hearing has been set for MONTH DAY, 2017, beginning at XX:XX p.m., before the Honorable Margaret Catharine Rogers at the United States District Court for the Northern District of Florida, Winston E. Arnow Federal Building, 100 North Palafox Street, Pensacola, Florida in Courtroom. At the hearing, the Court will consider whether to: (1) grant final certification to the Settlement Class for settlement purposes; (2) approve the Settlement as fair, reasonable, and adequate; and (3) award any Attorneys Fees and Expenses to Class Counsel and a Service Award to Plaintiffs. The Court will also consider any and all objections to the Settlement and any other issues relating to the Settlement. After the hearing, the Court will decide whether to approve the Settlement. It is not possible to predict how long the Court s decision will take. NOTE: The Court has reserved the right to change the date and/or time of the Fairness Hearing, or to continue it, without further notice. If you plan to attend the Fairness Hearing, you should confirm the date and time shortly before travelling to attend the hearing by checking or the Court s Public Access to Court Electronic Records (PACER) system at Do I have to come to the Fairness Hearing? No. Class Counsel will represent the Settlement Class at the Fairness Hearing. But you are welcome to come at your own expense. If you send an objection, you are not required to come to the Fairness Hearing to talk about it. As long as your written objection was timely filed and meets the other requirements described in Section 18 above, the Court will consider it. You may also hire and pay your own lawyer to attend the Fairness Hearing, but you are not required to do so. 22. May I speak at the Fairness Hearing? You may ask the Court for permission to speak at the Fairness Hearing, but only if you timely file a written objection in full compliance with the instructions set forth in Section 18, and if you also state in that objection that you would like to speak at the Fairness Hearing. However, any separate attorney you hire may appear only if he or she files through the Court s Case Management/Electronic Case Filing (CM/ECF) system a separate Notice of Intention to Appear in Begley v. Ocwen Loan Servicing, LLC (case number 3:16-cv-149-MCR-CJK). That notice must be filed with the Court no later than MONTH DAY, You cannot speak at the Fairness Hearing if you have excluded yourself from the Settlement Class. Questions? Call , or visit Page 10

81 Case 3:16-cv MCR-CJK Document 46-3 Filed 05/12/17 Page 11 of What if I do nothing? IF YOU DO NOTHING If you do nothing, and the Settlement is given final approval by the Court, you will not receive an Account Adjustment on any loan that is still be serviced by Ocwen or that was transferred to another company for servicing and remains an open and active debt. You will also be bound by the Release, and therefore you will not be able to file your own lawsuit, continue with your own lawsuit, or be part of any other lawsuit against Ocwen and the Released Parties concerning any of the Released Claims. 24. Where can I get additional information? GETTING MORE INFORMATION This notice summarizes the proposed settlement. For the precise terms and conditions of the settlement, please see the Settlement Agreement available at by calling the toll-free number below, by accessing the Court docket in this case through the Court s Public Access to Court Electronic Records (PACER) system at or by visiting the office of the Clerk of the Court for the United States District Court for the Northern District of Florida, Winston E. Arnow Federal Building, 100 North Palafox Street, Pensacola, Florida 32502, between 8:00 a.m. and 4:30 p.m., Monday through Friday, excluding Court holidays. PLEASE DO NOT TELEPHONE THE COURT, THE COURT CLERK S OFFICE, OR OCWEN TO INQUIRE ABOUT THIS SETTLEMENT. Questions? Call , or visit Page 11

82 Case 3:16-cv MCR-CJK Document 46-4 Filed 05/12/17 Page 1 of 2 Return address Begley v. Ocwen Loan Servicing, LLC Class Settlement Case No.: 3:16-cv-149-MCR-CJK Borrower name(s) and mailing address CLAIM FORM Borrowers who made mortgage payments to Ocwen Loan Servicing, LLC ( Ocwen ) on or after February 1, 2013 through a weekly or biweekly payment plan administered by ACI Worldwide, Inc. while their loans were being serviced by Ocwen on the REALServicing platform may file a claim if they believe any of those payments have been misapplied. By filing a claim, you will receive an accounting of how your payments were actually applied, and how they should have been applied had all ACI Extra Payments been immediately applied to reduce the outstanding principal balance of your loan. Any differences will be reflected in a proposed Account Adjustment, which will only take effect if you approve that Account Adjustment. THIS CLAIM FORM RELATES ONLY TO THE LOAN NUMBER BELOW. If you have more than one loan within the settlement, you will be sent separate notices and claim forms for each of those loans. You must submit a separate claim form for each loan that you wish to have reviewed under the settlement. Please refer to the Notice and full Stipulation of Settlement and Release if you have any questions, both of which are available for review on the website listed below. In order to obtain this accounting and find out what, if any, Account Adjustment your loan would qualify for under the Settlement, you must complete this Claim Form and mail it to: Begley v. Ocwen Loan Servicing, LLC, c/o Class-Settlement.com PO Box 9009 Hicksville, NY YOUR CLAIM MUST BE RECEIVED ON OR BEFORE MONDAY DAY, If you submit a Claim Form, a written Determination Notice will be mailed to you following completion of the Claims Process to explain what, if any, Account Adjustment you qualify for under the Settlement. That notice will also explain what you must do if you wish to accept the Settlement Administrator s Account Adjustment determination or challenge it, and the deadlines for doing so. Address Verification My My name/address are correct as displayed above. My Changes to my name/address are necessary. My correct name and address are as follows:: Name: Address: City/State/Zip: By signing and submitting this Claim Form, I affirm that I have reviewed the accompanying notice explaining the Settlement in the above-styled lawsuit, and I hereby authorize Ocwen to obtain loan and payment histories and related information from any transferee servicers of any loan identified above. I further consent to an audit of the above identified loan by Ocwen and to possible review of that audit by the Settlement Administrator, Class Counsel and Ocwen s Counsel, to determine what, if any, Account Adjustment my loan might be eligible for under the Settlement. QUESTIONS? Call , or visit

83 Case 3:16-cv MCR-CJK Document 46-4 Filed 05/12/17 Page 2 of 2 OCWEN LOAN NUMBER X Signature

84 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 11 of of IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA JOHN ROBERT BEGLEY and CARRIE BELL BEGLEY, on behalf of themselves and all others similarly situated, v. Plaintiffs, OCWEN LOAN SERVICING, LLC, and PRIMARY RESIDENTIAL MORTGAGE, INC., Defendants. : : : : : : : : : : : : FIRST AMENDED CLASS ACTION COMPLAINT JURY DEMANDED 3:16cv149-MCR/CJK Now come Plaintiffs, Robert and Carrie Begley, on behalf of themselves and all other similarly situated residents of the United States of America and allege as follows: PARTIES 1. Plaintiffs are residents of Gulf Breeze, Florida who entered into a mortgage contract in May of See GMAC Mortgage, attached hereto as Exhibit A. The Lender is identified as PRIMARY RESIDENTIAL MORTGAGE, INC. Id. at 1. The servicing of the mortgage was immediately assigned to GMAC MORTGAGE CORPORATION, and all payments on the mortgage were immediately due and owing to GMAC. Id. at 23 and 37. In February of 2013, the mortgage was assigned to Ocwen Loan Servicing, LLC. 2. Defendant, Ocwen Loan Servicing, LLC ( Ocwen ) is a Delaware limited liability company operating as a subsidiary of Ocwen Financial Corporation, a Florida corporation. Ocwen is, among other things, one of the largest residential mortgage servicers in the United States and its servicing portfolio has grown from approximately $55 billion in 2010 to over $518 billion. Ocwen is not a national bank, nor is it regulated by the Office of the Comptroller of Currency or governed by the National Bank Act. 1

85 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 22 of of Defendant, Primary Residential Mortgage, Inc., ( PRMI ) is a Nevada corporation. PRMI is not a national bank, nor is it regulated by the Office of the Comptroller of Currency or governed by the National Bank Act. JURISDICTION AND VENUE 4. This Court has subject matter jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C. 1332(d), because there are 100 or more Class Members and the aggregate amount in controversy exceeds $5,000, exclusive of interest and costs. Additionally, at least one Class member is a citizen of a state different from the corporate domicile of the Defendant. 5. This case is properly maintainable as a class action pursuant to and in accordance with Rule 23(a) of the Federal Rules of Civil Procedure in that the class, which includes an unknown number of persons but certainly more than 100, is so numerous that joinder of all members is impractical, there are substantial questions of law and fact common to the class, and this case is properly maintainable as a class action pursuant to Rule 23(b) of the Federal Rules of Civil Procedure, in that: (a) (b) (c) (d) questions of law and fact enumerated below, which are all common of the class, predominate over any questions of law or fact affecting only individual members of the class; a class action is superior to any other type of action for the fair and efficient adjudication of the controversy; the relief sought in this class action will effectively and efficiently provide relief to all members of the class; and there are no unusual difficulties foreseen in the management of this class action. 2

86 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 33 of of The Court has personal jurisdiction over the Defendants, who have at least minimum contacts with the State of Florida because the Defendants conducts business there and have availed themselves of the laws of Florida. 7. This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C Venue in the United States District Court for the Northern District of Florida is proper because the Defendants transact business within this District and a substantial part of the events giving rise to the claims at issue in this Complaint occurred in this District. 9. All conditions precedent to this action have occurred, been performed, or have been waived. FACTUAL ALLEGATIONS Misapplication of Mortgage Payments by Ocwen 10. This action arises from the misapplication of mortgage payments by Ocwen. 11. Ocwen regularly purchases mortgage portfolios as well as enters into agreements with mortgage lenders for servicing of residential home mortgages that also entail Ocwen s acquiring servicing and other rights and receiving assignments of residential home mortgage loans. 12. Ocwen regularly asserts its rights to act as a mortgage assignee in foreclosure proceedings across the country, as well as other circumstances. 13. Ocwen also regularly solicits loan modifications of home mortgage loans from borrowers through mailings and customer service calls, further evidencing its ownership or assignment interest in residential home mortgage loans. 3

87 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 44 of of Many mortgage lenders and mortgage brokers encourage and solicit borrowers to pay their mortgage on an accelerated schedule. The stated purpose is to reduce principal balance on an accelerated rate, thereby reducing the amount of interest paid on the loan, resulting in complete payoff of the loan in advance of the original payoff date. For example, a borrower that pays one half of their monthly mortgage payments on a bi-weekly schedule will actually make twenty-six (26) payments in one year, totaling thirteen (13) full monthly payments, resulting in one extra monthly mortgage payment per year. In addition to making one extra monthly mortgage payment every twelve months, paying on a bi-weekly schedule accelerates the payments in that the borrower is paying earlier than required under the mortgage, providing Ocwen earlier access to the monies. 15. Because interest is calculated by multiplying the agreed upon interest rate by the remaining loan balance, a borrower paying any monies early and in excess of the scheduled monthly payment should realize a reduction in principal, and accordingly a reduction in the amount of interest paid, each time the excess payment is made. 16. This fundamental payment practice is recognized in the GMAC Mortgage, and in fact in all standard Fannie Mae/Freddie Mac uniform mortgage agreements. Lenders and servicers are required to apply amounts paid by the borrower in excess of the original scheduled monthly payments to the principal loan balance. See Ex. A at 4, Section 2 ( Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. ) 17. Ocwen administers, services, and/or has an ownership or assignment interest many mortgages in the State of Florida and throughout the United States where the borrower has chosen to pay on accelerated schedule. 4

88 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 55 of of For borrowers paying on an accelerated schedule, Ocwen has purposefully and deliberately failed or refused to apply excess payments to the principal loan balance. 19. Rather than applying excess payments to a borrower s loan balance, Ocwen applies only one cent ($0.01) to principal and holds the remaining amount in suspense until additional funds are received to equal a full monthly mortgage payment regardless of whether the borrower is ahead of the original payment schedule. 20. Ocwen pays the borrower no interest on the funds held in suspense. 21. Once the borrower is a paid up and ahead of the monthly amount due and owing on the mortgage, Ocwen does not apply additional, early payments directly to principal as required under the Mortgage. Instead, Ocwen applies the additional, early payment as a new monthly payment for the following month. Because Ocwen holds the additional early payment in a suspense account allowing Ocwen early access to the funds, it does not reduce principal in an accelerated manner. As a direct result, Ocwen collects more interest than allowed under the terms of the Mortgage and Note. 22. Ocwen s practices and procedures deprive borrowers of the reduction in principal and interest at the time of the excess payment, thereby causing more funds than required to be applied to interest on each future payment. 23. Ocwen s practices and procedures of holding excess payments in suspense further deprives the borrower of interest each day on the excess funds held in a suspense account. 24. Upon information and belief, the excess payments that Ocwen receives midmonth, the payments that amount to less than a full monthly mortgage payment that are designated as Suspense Payments, are moved into an interest-bearing account for which Ocwen retains the proceeds and profits. 5

89 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 66 of of Plaintiffs Robert and Carrie Begley 25. On May 12, 2006, Robert and Carrie Begley entered into a mortgage agreement with PRMI as the security instrument for the purchase of their home at 1254 Greenview Lane in Gulf Breeze, Florida Plaintiffs also executed a Note. See Exhibits A and B. 26. Immediately, Plaintiffs Mortgage was assigned to GMAC Mortgage Corporation ( GMAC ) for, among other things, servicing. See Ex. A at 23 and Plaintiffs monthly mortgage payment of $3, was paid each month, once per month, from 2006 to In 2012, Plaintiffs received a solicitation from GMAC offering, among other things, a bi-weekly accelerated mortgage payoff program. See Purchase Power Mortgage Program, attached hereto as Exhibit. C Among other things, the program offered to debit one-half of Plaintiffs monthly mortgage payment bi-weekly, thereby effectuating twenty-six (26) bi-weekly payments per year, resulting in thirteen (13) full monthly payments per year. The plan promised that doing so would reduce the time it takes to pay off your mortgage, resulting in interest savings over the life of the loan. Id. 30. The purpose of the program was to reduce the principal balance of the loan at an accelerated rate, thereby reducing the amount of interest paid by Plaintiffs and to pay off the loan in its entirety years earlier than scheduled. 31. GMAC provided Plaintiffs an amortization schedule that compared their one-time monthly payment schedule with the anticipated bi-weekly payment schedule, illustrating the 1 The accelerated payment plan marketing materials attached as Ex. C is not the same solicitation Plaintiffs received in 2012, though it contains similar statements regarding the plan and how accelerated payments would impact mortgages. 6

90 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 77 of of reduction of principal and resulting savings in interest with the bi-weekly payment schedule. See GMAC Amortization Schedule, attached as Ex. C. 32. Plaintiffs started making payments bi-weekly in accordance with the program beginning on October 19, Accordingly, the Plaintiffs bank account was debited one-half of their monthly mortgage payment, in the amount of $1, every two weeks, from that day forward. Thereafter, Plaintiffs bank account has been debited $1, bi-weekly. 33. On February 7, 2013, GMAC provided written notice to Plaintiffs that it was the subject of a bankruptcy proceeding. See GMAC Letter, Exhibit E. 34. The notice further indicated Plaintiffs mortgage and note was transferred to Ocwen. Id. 35. As it is the regular course of business, Ocwen received an assignment of Plaintiffs mortgage and note. 36. Upon the assignment, Ocwen became a party to the mortgage and note contracts, or otherwise assumed an ownership or assignment interest in them. 37. Following the assignment, Ocwen has purposefully and deliberately failed or refused to apply Plaintiffs excess payments to the principal loan balance. 38. Rather than applying the Plaintiffs excess payments directly to the loan principal balance, Ocwen has applied only one cent ($0.01) to principal and holds the remaining amount in suspense until additional funds are received to equal a full monthly payment. 39. Ocwen pays the borrower no interest on the funds held in suspense. 40. Once the Plaintiffs were paid up and ahead of the monthly amount due and owing on the mortgage, Ocwen did not apply additional, early payments directly to principal as required under the Mortgage. Instead, Ocwen applies the additional, early payment as a new monthly 7

91 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 88 of of payment for the following month, which had the effect of paying Ocwen early but did not reduce principal in an accelerated manner. As a direct result, Ocwen was paid more interest than it should have been paid based on the contract and when the payments were received. 41. Ocwen s practices and procedures deprived Plaintiffs of the reduction in principal and interest at the time of the excess payment, thereby causing more funds than required to be applied to interest on each future payment. 42. Upon information and belief, the excess payments that Ocwen receives from the Plaintiffs mid-month, the payments that amount to less than a full monthly mortgage payment that are designated as Suspense Payments, are moved into an interest-bearing account for which Ocwen retains the proceeds and profits. A. Class Definitions CLASS ALLEGATIONS 43. Plaintiffs bring this action against Defendants pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of themselves and all other persons similarly situated. Plaintiffs seek to represent the following classes: Nationwide Class: PMRI Class: All borrowers in good standing who made mortgage payments to Ocwen in excess of their monthly scheduled payment. Excluded from this class are Defendants, their affiliates, subsidiaries, agents, board members, directors, officers, and/or employees, class counsel in this matter and the Court personnel in this matter. All borrowers in good standing whose mortgage loan originated with Primary Residential Mortgage, Inc., who made mortgage payments to Ocwen in excess of their monthly scheduled payment. Excluded from this class are Defendants, their affiliates, subsidiaries, agents, board members, directors, officers, and/or employees, class counsel in this matter and the Court personnel in this matter. 8

92 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page 99 of of Florida Class as to Count V - Florida Deceptive and Unfair Trade Practices Act: All Florida borrowers in good standing who made mortgage payments to Ocwen in excess of their monthly scheduled payment. Excluded from this class are Defendants, their affiliates, subsidiaries, agents, board members, directors, officers, and/or employees, class counsel in this matter and the Court personnel in this matter. 44. Plaintiffs reserve the right to modify or amend the definitions of the proposed classes before the Court determines whether certification is appropriate. 45. Defendants subjected Plaintiffs and the respective Class Members to the same unfair, unlawful, and deceptive practices and harmed them in the same manner. B. Numerosity 46. The proposed classes are so numerous that joinder of all members would be impracticable. Ocwen services a large number of mortgage loans in the State of Florida, as well as nationwide. Many of these loans originated with PRMI. The individual Class Members are ascertainable, as the names and addresses of all class members can be identified in the business records maintained by Ocwen. The precise number of class members for each class numbers at least in the thousands and can only be obtained through discovery, but the numbers are clearly more than can be consolidated in one complaint such that it would be impractical for each member to bring suit individually. Plaintiffs do not anticipate any difficulties in the management of the action as a class action. C. Commonality 47. There are questions of law and fact that are common to Plaintiffs and Class Members claims. These common questions predominate over any questions that go particularly 9

93 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of to any individual member of the Class. Among such common questions of law and fact are the following: a. Whether Ocwen or PMRI failed or refused to apply excess payments made by borrowers to their loan principal balance as required by law or the borrowers mortgage agreements; b. Whether Ocwen or PMRI breached the mortgage contracts with Plaintiffs and the Class by failing or refusing to apply excess payments made by borrowers to their loan principal balance as required by law or the borrowers mortgage agreements; c. Whether Ocwen or PMRI placed excess mortgage payments in an interest-bearing account and retained the interest earned; d. Whether Ocwen or PMRI was negligent in failing or refusing to apply excess payments made by borrowers to their loan principal balance as required by law or the borrowers mortgage agreements e. Whether an objective consumer would be deceived by Ocwen s or PMRI s excess mortgage payment practices as well as material mis-statements and omissions made to consumers regarding the impact of how Ocwen or PMRI applied excess payments to the mortgage balance, thereby violating FDUTPA; f. Whether Ocwen or PMRI intentionally and unjustifiably interfered with Plaintiffs and the Classes rights under the mortgage contracts by requiring borrowers to pay more interest on their mortgage than they should have and also profiting from interest on funds held in suspense ; and g. Whether Plaintiffs and the Class Members are entitled to damages and/or injunctive relief as a result of Ocwen s or PMRI s conduct. h. Whether Ocwen was assigned Plaintiffs note and mortgage contracts attached here as Exhibits A and B, or hold any rights regarding the note and mortgage contracts. i. Whether Ocwen, as servicer of Plaintiffs mortgage, is the agent of PRMI. k. Whether PRMI is responsible for the acts of Ocwen. l. Whether PRMI has received any benefit from the wrongful acts of Ocwen as described herein. D. Typicality 48. Plaintiffs are members of the Class they seek to represent. Plaintiffs claims are typical of the respective classes members claims because of the similarity, uniformity, and 10

94 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of common purpose of Ocwen s (and/or PMRI s) unlawful conduct. Each class member has sustained, and will continue to sustain, damages in the same manner as Plaintiffs have as a result of Ocwen s (and/or PMRI s) wrongful conduct. E. Adequacy of Representation 49. Plaintiffs are adequate representatives of the classes they seek to represent and will fairly and adequately protect the interests of the classes. Plaintiffs are committed to the vigorous prosecution of this action and have retained competent counsel, experienced in litigation of this nature, to represent them. There is no hostility between Plaintiffs and the unnamed class members. Plaintiffs anticipate no difficulty in the management of this litigation as a class action. 50. To prosecute this case, Plaintiffs have chosen the undersigned law firms, which are very experienced in class action litigation and have the financial and legal resources to meet the substantial costs and legal issues associated with this type of litigation. F. Requirements of Fed. R. Civ. P. 23(b)(3) 46. The questions of law or fact common to Plaintiffs and each Class Member s claims predominate over any questions of law or fact affecting only individual members of the classes. All claims by Plaintiffs and the unnamed class members are based on the misapplication of excess mortgage payments. 47. Common issues predominate when, as here, liability can be determined on a classwide basis, even if there will be some individualized damage determinations. 48. As a result, when determining whether common questions predominate, courts focus on the liability issue, and if the liability issue is common to the class as is the case at bar, common questions will be held to predominate over individual questions. 11

95 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of G. Superiority 49. A class action is superior to individual actions in part because of the nonexhaustive factors listed below: (a) Joinder of all class members would create extreme hardship and inconvenience for the affected customers as they reside all across the states; (b) Individual claims by class members are impractical because the costs to pursue individual claims may exceed the value of what any one class member has at stake. As a result, individual class members may have no interest in prosecuting and controlling separate actions; (c) There are no known individual class members who are interested in individually controlling the prosecution of separate actions; (d) The interests of justice will be well served by resolving the common disputes of potential class members in one forum; (e) Individual suits would not be cost effective or economically maintainable as individual actions; and (f) The action is manageable as a class action. H. Requirements of Fed. R. Civ. P. 23(b)(1) & (2) 50. Prosecuting separate actions by or against individual class members would create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class. 51. Defendants have acted or failed to act in a manner generally applicable to the entirety of the class or classes, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the classes as a whole. COUNT I BREACH OF CONTRACT (As to Ocwen) 52. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 53. Ocwen was assigned the home mortgage loans of the Plaintiffs and the Classes. 12

96 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Plaintiffs and all similarly situated Class Members have mortgages that are owned and/or serviced by Ocwen. 55. Plaintiffs and these Class Members mortgages are written on uniform mortgage forms and contain the same or substantially similar provisions regarding the application of excess mortgage payments. See Ex. A at 4, sec After excess payments are applied to other amounts due, Plaintiffs mortgage requires Ocwen to apply excess mortgage payments to reduce the principal balance of the loan. Id. 57. Similarly, Plaintiffs and these Class Members were issued Mortgage Notes which are uniform forms and contain the same or substantially similar provisions regarding the application of excess mortgage payments. See Ex. B. 58. The Note includes the following language: 4. BORROWER S RIGHT TO PREPAY The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. Id. 59. This language is the same or substantially similar to provisions within Notes for all Class Members regarding the application of excess mortgage payments, and requires the servicer to apply excess mortgage payments directly to principal rather than hold payments in suspense or apply excess payments to the schedule s next month s monthly mortgage payment. 60. Ocwen s practices and procedures deprive borrowers of the reduction in principal and interest at the time of the excess payment, thereby causing more funds than required to be applied to interest on each future payment. 13

97 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Ocwen s practices and procedures of holding excess payments in suspense further deprives the borrower of interest each day on the excess funds held in a suspense account and constitutes a breach of contract. 62. Ocwen s refusal to apply excess mortgage payments to Plaintiffs and the Class members principal constitutes breach of contract. 63. Plaintiffs and the Class Members have suffered damages as a result of Ocwen s breaches of contract. COUNT II BREACH OF CONTRACT (As to PRMI) 64. Plaintiffs, on behalf of themselves and the PRMI Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: PRMI. 65. Plaintiffs and PRMI Class Members have mortgages that were originated by 66. Plaintiffs and these PRMI Class Members mortgages are written on uniform mortgage forms and contain the same or substantially similar provisions regarding the application of excess mortgage payments. See Ex. A at 4, sec After payments are applied to other amounts due, Plaintiffs mortgage requires PRMI, or any mortgage servicer engaged by PRMI to apply excess mortgage payments to reduce the principal balance of the loan. Id. 68. Similarly, Plaintiffs and these Class Members were issued mortgage notes which are uniform forms and contain the same or substantially similar provisions regarding the application of excess mortgage payments. See Ex. B. 69. The note includes the following language: 14

98 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of BORROWER S RIGHT TO PREPAY The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. Id. 70. This language is the same or substantially similar to provisions within notes for all PRMI Class Members regarding the application of excess mortgage payments, and requires the servicer to apply excess mortgage payments directly to principal rather than hold payments in suspense or apply excess payments to the schedule s next month s monthly mortgage payment. 71. The practices and procedures of Ocwen, as agent/assignee of PRMI, deprive borrowers of the reduction in principal and interest at the time of the excess payment, thereby causing more funds than required to be applied to interest on each future payment. 72. As the agent of PRMI, Ocwen s practices and procedures of holding excess payments in suspense further deprives the borrower of interest each day on the excess funds held in a suspense account and constitutes a breach of contract. 73. As agent of PRMI, Ocwen s refusal to apply excess mortgage payments to Plaintiffs and the Class members principal constitutes breach of contract. 74. Plaintiffs and the PRMI Class members have suffered damages as a result of Ocwen s breaches of contract. COUNT III BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (As to Ocwen) 75. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 15

99 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of A covenant of good faith and fair dealing is implied in every contract and imposes upon each party a duty of good faith and fair dealing in its performance. Common law calls for substantial compliance with the spirit, not just the letter, of a contract in its performance. 77. Plaintiffs and the Class Members mortgage contracts require Ocwen to apply excess mortgage payments to reduce the principal balance of the loan. 78. Ocwen breached the implied covenant of good faith and fair dealing by, among other things, failing or refusing to apply excess payments to a borrower s principal loan balance, applying only one cent ($0.01) to principal and holding the remaining amount in suspense until additional funds are received to equal a full monthly payment, and holding excess payments in a suspense account for which it retains interest proceeds for its own profits. 79. As a direct, proximate, and legal result of the aforementioned breaches of the covenant of good faith and fair dealing, Plaintiffs and the Class have suffered damages. COUNT IV BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (As to PRMI) 80. Plaintiffs, on behalf of themselves and the PRMI Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 81. A covenant of good faith and fair dealing is implied in every contract and imposes upon each party a duty of good faith and fair dealing in its performance. Common law calls for substantial compliance with the spirit, not just the letter, of a contract in its performance. 82. Plaintiffs and the PRMI Class Members mortgage contracts require Ocwen as the agent of PRMI to apply excess mortgage payments to reduce the principal balance of the loan. 16

100 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Ocwen, as agent for PRMI breached the implied covenant of good faith and fair dealing by, among other things, failing or refusing to apply excess payments to a borrower s principal loan balance, applying only one cent ($0.01) to principal and holding the remaining amount in suspense until additional funds are received to equal a full monthly payment, and holding excess payments in a suspense account for which it retains interest proceeds for its own profits. 84. As a direct, proximate, and legal result of the aforementioned breaches of the covenant of good faith and fair dealing, Plaintiffs and the PRMI Class have suffered damages. COUNT V UNJUST ENRICHMENT 2 (As to Ocwen) 85. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 86. Ocwen and/or its affiliates received from Plaintiffs and Class Members benefits, in the form of funds earned on interest it has held and continues to hold in suspense. 87. Further, Ocwen received financial benefits in the form of increased interest income due to its own deliberate and purposeful failure or refusal to apply excess payments by Plaintiffs and the Class to the mortgage principal loan balances. 88. In addition, Ocwen received financial benefits in the form of increased security on the notes in that the payments were attributable to later payments due rather than towards equity on the property. 89. As a result, Plaintiffs and the Class have conferred a benefit on Ocwen. 2 Plaintiffs and the Class plead unjust enrichment as an alternative to their contractual claims against Ocwen. 17

101 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Ocwen had knowledge of this benefit and voluntarily accepted and retained the benefit conferred on it. 91. Ocwen will be unjustly enriched if it is allowed to retain the aforementioned benefits, and each Class Member is entitled to recover the amount by which Ocwen was unjustly enriched at his or her expense. COUNT VI UNJUST ENRICHMENT 3 (As to PRMI) 92. Plaintiffs, on behalf of themselves and the PRMI Class, re-allege and incorporate every paragraph of this Complaint and further allege: 93. Ocwen and/or its affiliates including PRMI received from Plaintiffs and PRMI Class Members benefits, in the form of funds earned on interest it has held and continues to hold in suspense. 94. Further, Ocwen and/or its affiliates including PRMI received financial benefits in the form of increased interest income due to their own deliberate and purposeful failure or refusal to apply excess payments by Plaintiffs and the PRMI Class to the mortgage principal loan balances. 95. In addition, PRMI received financial benefits in the form of increased security on the notes in that the payments were attributable to later payments due rather than towards equity on the property, and also in the form of an increased value of the notes generally for potential resale on the open market by PRMI. PRMI. 96. As a result, Plaintiffs and the PRMI Class have conferred a benefit on Ocwen and 3 Plaintiffs and the PRMI Class plead unjust enrichment as an alternative to their contractual claims against Ocwen and PRMI. 18

102 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Ocwen and PRMI had knowledge of this benefit and voluntarily accepted and retained the benefit conferred on it. 98. Ocwen and PRMI will be unjustly enriched if it is allowed to retain the aforementioned benefits, and each PRMI Class Member is entitled to recover the amount by which Ocwen and PRMI was unjustly enriched at his or her expense. COUNT VII NEGLIGENCE (As to Ocwen) 99. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 100. Plaintiffs mortgage requires Ocwen to apply excess mortgage payments to reduce the principal balance of the loan As the assignee or acquirer of mortgage loans (or the holder of pertinent rights thereunder) of the Plaintiffs and the Class, Ocwen owes a duty of care them Ocwen s practices and procedures of holding excess payments in a suspense account for a period of time, rather than applying those excess funds to the principal amount when received deprives Plaintiffs and the Class of a reduction in principal and interest at the time of the excess payment. Consequently, as a result, more funds are applied to interest on each future payment, thereby causing damages to Plaintiffs and the Class After Plaintiffs complained to Ocwen that their principal had not been reduced by their excess payments, Ocwen admitted to negligence in a letter dated December 3, 2013 to Plaintiffs, indicating it had experienced system issues, and there was no error on the part of the Plaintiffs. See December 3, 2013 letter from Ocwen attached hereto as Exhibit D Subsequently, Ocwen has failed or refused to correct the system issue and Plaintiffs and the Class have and continue to suffer damages a result of Ocwen s negligence. 19

103 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Ocwen failed to exercise reasonable care to avoid harm to Plaintiffs and the Class Ocwen s failure to apply excess mortgage payments to Plaintiffs and the Class Members mortgages constitutes negligence. negligence Plaintiffs and the Class members have suffered damages as a result of Ocwen s COUNT VIII NEGLIGENCE (As to PRMI) 108. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 109. Plaintiffs mortgage requires PRMI, directly or through its agents or assigns, to apply excess mortgage payments to reduce the principal balance of the loan As the originator of mortgage loans (or the holder of pertinent rights thereunder) of the Plaintiffs and the Class, PRMI owes a duty of care them PRMI s practices and procedures (or lack thereof) relating to the oversight of how it, or PMRI s agents or assigns, hold excess payments in a suspense account for a period of time, rather than applying those excess funds to the principal amount when received deprives Plaintiffs and the Classes of a reduction in principal and interest at the time of the excess payment. Consequently, as a result, more funds are applied to interest on each future payment, thereby causing damages to Plaintiffs and the Classes PRMI s agent or assign, Ocwen, admitted to negligence in a letter dated December 3, 2013 to Plaintiffs, indicating it had experienced system issues, and there was no error on the part of the Plaintiffs. See December 3, 2013 letter from Ocwen attached hereto as Exhibit D. 20

104 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Subsequently, PRMI failed or refused to correct the system issue identified by Ocwen, PRMI s agent or assign, and Plaintiffs and the Class have and continue to suffer damages a result of PRMI s negligence PRMI failed to exercise reasonable care to avoid harm to Plaintiffs and the Class PRMI s failure to monitor or oversee the proper application of excess mortgage payments to Plaintiffs and the Class Members mortgages constitutes negligence. negligence Plaintiffs and the Class members have suffered damages as a result of PRMI s COUNT IX VIOLATION OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT (As to Ocwen) 117. Plaintiffs, on behalf of themselves and the Florida Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 118. FDUTPA, section , et seq., Florida Statutes, prohibits unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce , Fla. Stat In addition to loan servicing, Ocwen also regularly solicits loan modifications of home mortgage loans from borrowers through mailings and customer service calls in Florida Ocwen s business practices are conduct in trade or commerce as defined by FDUTPA, section , et seq., 121. Plaintiffs and the Florida Class are consumers as that term is defined in section (7), Florida Statutes. 21

105 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Specifically, Ocwen is bound to service the mortgage based on the terms of the Mortgage, the Note and accelerated payment plan marketing materials set forth by GMAC. See Exs. A, B and C In failing to do so, Ocwen has engaged in, and continues to engage in, unconscionable acts or practices and has engaged in unfair or deceptive acts in the conduct of its trade and/or commerce in the State of Florida. Ocwen s actions result in material misrepresentations and omissions to the Plaintiffs and class members The policies, acts, and practices alleged herein were intended to result and did result in the excessive payment of interest to Ocwen not allowed or contemplated by the mortgage agreements it is bound by and that it has with Plaintiffs and the Florida Class The policies, acts, and practices alleged herein were intended to result and did result in unlawful or unfair compensation for Ocwen Ocwen s conduct of purposefully and deliberately failing or refusal to apply excess payments by Plaintiffs and the Class to the mortgage loan balance violates FDUTPA and was conceived, devised, planned, implemented, approved and executed within the State of Florida, which has an interest in prohibiting violations of FDUTPA Ocwen it is not a bank or savings and loan association regulated by federal agencies Plaintiffs and the Florida Class have sustained damages as a direct and proximate result of Ocwen s unfair and unconscionable practices. Section (2), Florida Statutes, provides Plaintiffs and the Florida Class a private right of action against the Defendant and entitles them to recover their actual damages, plus attorneys fees and costs. 22

106 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Plaintiffs and the Florida Class have suffered and will continue to suffer irreparable harm if Ocwen continues to engage in such deceptive, unfair, and unreasonable practices. COUNT X CONVERSION (As to Ocwen) 130. Plaintiffs, on behalf of themselves and the Class Members, re-allege and incorporate every paragraph of this Complaint and further allege: 131. Ocwen had and continues to have a duty to maintain and preserve the funds of Plaintiffs and the Class Members, and to prevent their diminishment through Ocwen s own wrongful acts By holding excess payments in a suspense account for a period of time, rather than applying those excess funds to the principal amount when received, without Plaintiffs and the Class Members consent, and failing to inform Plaintiffs and the Class Members of the suspense account process, Ocwen has, without proper authorization, assumed and exercised the right of ownership over Plaintiffs and the Class Members funds, in hostility to the rights of Plaintiffs and other Class Members without legal justification Ocwen has wrongfully collected payments from Plaintiffs and the Class Members, and has taken their specific and readily identifiable funds Ocwen continues to retain these funds unlawfully and without the consent of Plaintiffs or Class Members. funds Ocwen intends to permanently deprive Plaintiffs and the Class Members of these 23

107 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of These funds are properly owned and identifiable by Plaintiffs and the Class Members, not Ocwen. Yet, Ocwen now claims that it is entitled to the funds ownership, contrary to the rights of the Plaintiff and the other Class Members Plaintiff and the Class Members are entitled to immediate possession of these funds Ocwen has wrongfully converted these specific and readily identifiable funds As a direct and proximate result of this wrongful conversion, Plaintiffs and the Class Members have suffered and continue to suffer damages. Ocwen s wrongful conduct is continuing By reason of the foregoing, Plaintiffs and the other Class Members are entitled to recover from Defendants all damages and costs permitted by law, including all amounts that Ocwen has wrongfully converted. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, on behalf of themselves and all similarly situated individuals, demands judgment against the Defendants as follows: 1. Declaring this action to be a proper class action maintainable pursuant to Rule 23(a) and Rule 23(b)(1) and (2), or Rule 23(b)(3) of the Federal Rules of Civil Procedure and declaring Plaintiffs and their counsel to be representatives of the Classes; 2. Enjoining Ocwen from continuing the acts and practices described above; 3. Awarding damages sustained by Plaintiffs and the Classes as a result of Defendants breaches of the mortgage contracts and the implied covenant of good faith and fair dealing, together with pre-judgment interest; 24

108 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Finding that Ocwen and PRMI have been unjustly enriched and requiring it to refund all unjust benefits to Plaintiffs and the Classes, together with pre-judgment interest; 5. Finding Ocwen converted the Classes funds and requiring a full refund of all funds converted; 6. Awarding Plaintiffs and the Classes costs and disbursements and reasonable allowances for the fees of Plaintiffs and the Classes counsel and experts, and reimbursement of litigation expenses. 7. Awarding Plaintiffs and the Florida Class damages, injunctive relief, declaratory relief, attorneys fees, and costs under FDUTPA; and 8. Awarding such other and further relief the Court deems just and equitable. DEMAND FOR JURY TRIAL Plaintiffs and the Classes request a jury trial for any and all Counts for which a trial by jury is permitted by law. /s/ Bryan F. Aylstock Bryan F. Aylstock Aylstock, Witkin, Kreis & Overholtz, PLLC 17 E. Main Street, Suite 200 Pensacola, FL Phone: (850) Fax: (850) baylstock@awkolaw.com Richard M. Golomb, Esquire Kenneth J. Grunfeld, Esquire Golomb & Honik, P.C Market Street, Suite 1100 Philadelphia, PA Phone: (215) Fax: (215) rgolomb@golombhonik.com kgrunfeld@golombhonik.com 25

109 Case 3:16-cv MCR-CJK Document Filed 06/29/16 05/12/17 Page of of Joseph Jay H. Aughtman, Esquire Aughtman Law Firm, LLC 1722 Platt Place Montgomery, AL Phone: (334) Fax: (334) Aaron C. Hemmings, Esquire Hemmings & Stevens, P.L.L.C 5540 McNeely Drive, Suite 202 Raleigh, NC Phone: (919) Fax: (919) Dated: June 29, 2016 Attorneys for Plaintiffs and the Classes 26

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