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Mortgage Servicer Ocwen Supports Administration's Drive to Make More Loan Modifications Permanent
Ocwen Has Converted an Industry-Leading 74% of Its Trial Modifications to Permanent Status; Attributes Success to Scalable Technology, Usage of Behavioral Science and Collaboration With Consumer Advocacy Groups
| Source: Ocwen Financial Corporation
WASHINGTON, DC--(Marketwire - December 10, 2009) - Ocwen Financial Corporation (NYSE : OCN ) supports the Treasury Department's just announced "Mortgage
Modification Conversion Drive" -- a push to increase the number of trial
loan modifications converting to permanent modifications under its Home
Affordable Modification Program (HAMP). Ocwen has converted an
industry-leading 74% of its trial mortgage modifications to permanent
status. According to a HAMP progress report issued today by Treasury,
Ocwen accounts for a disproportionately high 13.5% of all permanent
modifications completed to date even though it services only 2% of the
estimated
HAMP-eligible 60+ day delinquencies.
"We've been working hard both before and after the HAMP program was
implemented to prevent foreclosures through sustainable loan
modifications," said William Erbey, Chairman and CEO of Ocwen, one of the
largest independent servicers of subprime mortgages and an early supporter
of HAMP. "That's the best solution for everyone long term -- keeping
homeowners in their homes with re-performing loans that yield greater cash
flow for mortgage-backed security investors."
Ocwen's Competitive Edge -- Proprietary, Scaleable Technology
Incorporating Behavioral Science
Ocwen has spent over 20 years and $150 million in R&D to build a
proprietary loan servicing technology platform. "Our technology is
specifically designed for high-touch customer service which is necessary to
optimize resolutions of delinquent mortgages. Our platform is also
scaleable and therefore capable of meeting the unprecedented levels of
defaults in the current environment," said Mr. Erbey.
Behavioral science research is a key component. "We have incorporated into
our scripting engines proven psychological principles for effective
borrower communication and buy-in," said Ronald Faris, Ocwen's President.
"This makes for better homeowner outreach and lasting loan work outs."
"We also use behavioral learning in the recruiting and training of our Home
Retention Consultant personnel, allowing for rapid expansion of staffing,"
added Mr. Faris. "After years of Six Sigma testing, we know the personality
profiles that are optimal for the job and can get new HRCs hired, trained
and doing successful loan modifications within 90 days." Since the outset
of the mortgage crisis, Ocwen has more than doubled its loss mitigation
staff.
Ocwen's technology advantage permits it to systematically execute the
detailed, document intensive re-underwriting work up front, on a large
scale, in advance of a trial modification. "Our approach increases the
likelihood that the trial modification will become permanent and not
redefault," explained Mr. Faris. According to OTS/OCC reports, Ocwen's
redefault rate is about half the industry's average.
Consumer Advocacy Partners are Indispensible
Ocwen collaborates with a range of independent housing advocacy and
grassroots groups to reach out to homeowners and to help them gather the
required documents for a modification. As part of that collaboration,
Ocwen's web site (www.ocwencustomers.com) now has a tool that helps
homeowners in financial distress get in touch with organizations and
government agencies that may be able to help them with budgeting, food
assistance, job training and other personal and financial issues. In
addition, Ocwen has posted videos on its website and on YouTube
(http://www.youtube.com/user/OcwenVideos) to help homeowners follow the
correct steps to potentially secure a mortgage modification.
Other Mortgage Players Turn to Ocwen
Ocwen's ability to perform sustainable loan modifications on a large scale
has prompted other financial institutions to turn to the company for
subservicing and special servicing. "So far this year, we have been
engaged to service and rehabilitate over $15 billion of delinquent
mortgages from Freddie Mac and a number of banks, and we are in discussions
with others for the similar engagements," said Mr. Erbey. "With our
scaleable platform, we can take on multiples of that volume."
About Ocwen
Ocwen Financial Corporation is a leading provider of residential and
commercial loan servicing, special servicing and asset management services.
Ocwen is headquartered in West Palm Beach, Florida with offices in
California, the District of Columbia, Florida, Georgia and New York and
global operations in India and Uruguay. Utilizing proprietary technology
and world-class training and processes, we provide solutions that make our
clients' loans worth more. Additional information is available at
www.Ocwen.com.