Ocwen

Posted by kevin on August 1, 2011 under Foreclosure Blog | Comments are off for this article

Settlements have been all over the lot in the last 12 months.  About a year ago, we were starting to see reduction in principal  in cases that were open for long periods of time because they were aggressively fought.  It reinforced our position that the best way to stop foreclosure was to fight foreclosure.  Then, the AG’s and federal regulators started pushing principal reductions.  Some of the “too big to fail” banks balked, and then we stopped seeing “reduce principal” offers.

We picked up information that Ocwen Financial Corp launched a new mod program to reduce prinicpal on mortgages for delinquent buyers.  Part of the deal is that the borrower and Ocwen share any appreciation upon sale.   The property has to be underwater.  Ocwen will write qualified loans down to 95% of the FMV.  The amount written down is forgiven in 1/3 increments over 3 years as long as the borrower stays current.  When the house is sold, Ocwen gets 25% of the appreciated value.

This program successfully finished a pilot program.

I offered this deal to numerous trusts as far back as 2009 with no bites from the servicers although the attorneys were intrigued.

This program has a lot of promise and I hope that it catches on.