Ocwen Completes Trial-to-Permanent Modifications

Ocwen Loan Servicing LLC said it has completed almost half of the trial mortgage modifications converted to permanent modifications for distressed homeowners under the Treasury Department's Home Affordable Modification Program. Ocwen said it has completed 44.6% of all of the permanent modifications done by the industry. This includes 27 large banks and servicers whose aggregate loan portfolios comprise the lion's share of the HAMP program, said Paul Koches, executive vice president, Ocwen Financial, West Palm Beach, Fla. The mortgages that Ocwen modified under the HAMP program are subprime mortgages it holds the servicing rights on but does not own, Mr. Koches told MortgageWire. These results show technology and an analytics-based approach to prudent modifications is paying off, added Ocwen president Ronald M. Faris. "We believe it's better for our business, and better for struggling homeowners, for us to do the difficult, detailed re-underwriting work upfront," he said in a press release. According to a recent report by the Congressional Oversight Panel monitoring the government's Troubled Asset Relief Program, only 1.26% of trial modifications under HAMP were able to convert to permanent status as of Sept. 1. Ocwen, however, says it converted 13.9% of its customers' trial modifications during that timeframe, and its conversion rate is now over 20% and climbing. To convert, the servicer must obtain and verify all documentation required of the homeowner and receive three monthly payments on the modified loan during the trial period. The converted modifications can also generate second- and third-year bonus fees for servicers, assuming the loans continue to perform.