Ocwen Financial Corp. reports that since the start of this year, it has initiated more than 14,000 trial plans to borrowers under the U.S. Department of the Treasury’s streamlined modification program that launched in January.
More than 4,100 of the borrowers who successfully completed trial plans under the program have already been converted to permanent modifications, according to the company.
Last year, the U.S. Department of the Treasury broadened the Home Affordable Modification Program (HAMP) to include a streamlined modification process designed to further assist borrowers who meet basic HAMP eligibility criteria but had not yet entered the initial program.
Government-sponsored enterprises Fannie Mae and Freddie Mac, under the auspices of the Federal Housing Finance Agency, launched their own streamlined modification program in March 2013. That program, which was supposed to end last year, included a new, simplified loan modification process to minimize losses and help troubled borrowers avoid foreclosure and stay in their homes.
Servicers participating in the Treasury Department’s streamlined modification program, which launched Jan. 1, are required to offer eligible borrowers who are at least 90 days delinquent on their mortgages an easy way to lower their monthly payments and modify their mortgages without requiring financial or hardship documentation.
Basically, the program eliminates some of the administrative barriers associated with document collection and evaluation. Eligible borrowers must demonstrate a willingness and ability to pay by making three on-time trial payments, after which the mortgages will be permanently modified.
Ocwen has been a HAMP participant since the program’s inception in 2009 and was an early adopter of the streamline modification program. As of March 31, the company had modified approximately 320,000 loans through the HAMP program – more than any other mortgage servicer.
Modifications completed by Ocwen account for 20% of the total modifications completed by all mortgage servicers under the program, the company says in a press release.
HAMP is scheduled to sunset at the end of this year.
“The success of the HAMP program has proven to be a huge benefit to both homeowners and communities hard hit by the housing crisis,” says Ron Faris, president and CEO of Ocwen, in a statement. “We are proud to be an integral part of that success, and we intend to dedicate the necessary resources to ensure that the program continues to accomplish its goals in the final year.”
“Ocwen is playing a critical role in helping borrowers better afford their homes and improve their financial health,” adds David Berenbaum, CEO of the Homeownership Preservation Foundation (HPF). “HPF connects Ocwen mortgage holders with HUD-certified housing counselors who help homeowners avoid foreclosure. HPF network counselors have helped more than 11,000 Ocwen customers increase their monthly cashflow by an average [of] $300 per month and improve their credit score by reducing debt. Ocwen’s best practices in mortgage modification and related consumer outreach are helping more consumers sustain homeownership.”