STATEMENT TO ELIGIBLE BORROWERS
You received a check pursuant to the Consent Order entered into in December 2014 between Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (“Ocwen”) and the New York Department of Financial Services (“NYDFS”). Under the Consent Order, Ocwen is required to make a payment to the borrowers on any home mortgage loans in New York for which it filed a foreclosure action or completed a foreclosure sale during the period January 1, 2009 through December 22, 2014 (“Eligible Borrowers”).
This Statement to Eligible Borrowers (“Statement”) provides information to help you determine the U.S. federal income tax consequences of the payment if you are a citizen or resident of the U.S. for U.S. federal income tax purposes.
ALL PAYMENTS IN CONNECTION WITH THIS AGREEMENT MAY BE SUBJECT TO TAXATION DEPENDING ON THE BORROWER’S INDVIDUAL CIRCUMSTANCES.
YOU SHOULD NOT RELY ON THIS STATEMENT AS TAX ADVICE. CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF YOUR PAYMENT, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX RULES.
Damasco & Associates LLP, a certified public accounting firm, (“Damasco”) was retained as the Tax Advisor for the Qualified Settlement Fund. Damasco has participated in the preparation of this Statement, but is not providing tax services or tax advice to you regarding your payment.
Under section 24(b)(i) of the Consent Order, Eligible Borrowers will receive $10,000 for each home foreclosed upon by Ocwen between January 1, 2009, and December 22, 2014. This $10,000 payment does not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained. For this reason, the entire $10,000 payment constitutes taxable income to you.
The payment administrator will issue a Form 1099-MISC to you reporting income of $10,000. If you are not a U.S. person, the payment administrator will issue a 1042-S for this amount.
Under section 24(b)(ii) of the Consent Order, the balance of a $50 million fund will be distributed equally for each foreclosure action filed by Ocwen between January 1, 2009 and December 22, 2014 in which Ocwen did not complete such foreclosure. Similar to the 24(b)(i) payments, these 24(b)(ii) payments do not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained. For this reason, the entire 24(b)(ii) payment constitutes taxable income to you.
The payment administrator will issue a Form 1099-MISC to you reporting this income only if your 24(b)(ii) payment equals or exceeds $600. Although the payment administrator does not have a Form 1099-MISC reporting obligation with respect to amounts less than $600, this does not determine the tax consequence of the payment in your hands. If you are not a U.S. person, the payment administrator will issue a 1042-S, regardless of the amount of the payment.
Questions? Call 1-877-541-3110 or email info@OcwenNYDFSPayments.com