Atlanta-based Ocwen Financial Services (OCN) agreed to pay Massachusetts $3.7 million to resolve claims that it failed to provide certain notices to homeowners as required by state law, in addition to unlawfully foreclosing on certain properties.

Massachusetts Attorney General Martha Coakley said that the national loan servicer failed to send state-mandated notices to homeowners in default and execute proper mortgage assignments, filed in the Massachusetts Registry of Deeds.

“Massachusetts homeowners faced unnecessary challenges due to these companies failure to provide proper notices and by initiating illegal foreclosures,” Coakley said. “This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth.”

Along with the other charges, Litton Home Servicing Limited Partnership, a company acquired by Ocwen, allegedly initiated foreclosures when it did not hold the actual mortgages in violation.

The servicer will pay $3 million to Massachusetts homeowners, and $700,000 to the Commonwealth.

"Ocwen is pleased to have a settlement agreement in place with the Massachusetts Attorney General that is aligned with our shared goals of preventing foreclosures and helping struggling families keep their homes," the firm said in a statement.

"Ocwen regularly meets with the Attorney General’s staff, including the HomeCorps team, in order to assist borrowers in obtaining modifications or other alternatives to foreclosure.  We look forward to continuing our productive engagement with the Attorney General’s office," Ocwen added. 

Ocwen recently hashed out an agreement with the New York Department of Financial Services, saying that it would stop using gag orders on mortgage modifications.

“Our agreement with the DFS deals with the highly unusual situation where there is a legal settlement agreement with a borrower, representing a fraction of one percent of our portfolio," said John Britti, chief investment officer with Ocwen.

"In addition to deleting non-disparagement clauses in any future legal settlements, we have likewise assured the DFS that we will not seek to enforce such clauses that are included in existing settlements,” he added. 

In its most recent earnings report, Ocwen reported a net income of $75.8 million for the first quarter of 2014 despite regulator woes.