Ocwen Sees Lower Re-Default Rate

Ocwen Financial Corp., a servicer of subprime credit quality mortgages, said that the 60-day delinquency rate on its modified mortgages after six months is 24.6%, considerably below industry averages. Ocwen noted that the Office of the Comptroller of the Currency recently reported that, overall, 53% of borrowers were more than 60-days past due six months after having their mortgage modified. William Erbey, CEO of Ocwen, said the salient issue in the success of modifications for troubled borrowers is whether the mods are properly designed. He praised FDIC chairman Sheila Bair's defense of modifications as a loss mitigation tool. "We believe she is correct that the re-default problem lies with how some servicers are doing modifications, not with the concept of modification. It's possible to do modifications right."