Freddie Launches Workout Plan for 'High Risk' Loans

Under a pilot program involving reduced documentation loans from California, Nevada and other high delinquency states, Freddie Mac is turning calls over to third-party servicers to perform loan workouts. Ingrid Beckles, Freddie Mac's senior vice president for default asset management, said the strategy is designed to help lenders manage "unprecedented call volume" by directing calls to a specialist in handling alternative-A credit mortgages and other high-risk loan products. Under the pilot, a selected portfolio of 5,000 loans that are at least 60 days delinquent will be given to a specialty servicer that can implement a Freddie Mac workout option, including a streamlined loan modification. Ocwen Financial Corp. is one of the servicers Freddie Mac has selected for the pilot. Freddie Mac said that alt-A mortgages account for half of its seriously delinquent home loans.