Leading Mortgage Servicer and State of Maryland Sign Compact to Curb Foreclosures, Preserve Home Ownership
Ocwen Financial Corporation and Governor Martin O'Malley Commit to Program to Help Homeowners and Mitigate Losses
WEST PALM BEACH, Fla., Nov. 10, 2008 -- Ocwen Financial Corporation (NYSE:OCN), a leading servicer of subprime mortgages, and Governor Martin O'Malley of Maryland have signed a compact designed to reduce foreclosures and keep Maryland homeowners in their homes.
The compact builds on Ocwen's approach to reducing foreclosures through a technology-enhanced program of modifying loans that are delinquent or at risk of becoming delinquent. In September, Ocwen reported that the program contributed to a decline in delinquencies in the most recent quarter. Ocwen services approximately 341,000 mortgages - 7,072 in Maryland -- 85% of which are subprime.
The compact states that "...Maryland recognizes Ocwen's leadership in the mortgage industry in its continuing commitment to avoiding foreclosure and preserving homeownership wherever possible" and in it Ocwen and the State of Maryland agreed "to establishing a streamlined, timely and meaningful loss mitigation process for Maryland homeowners."
Maryland Compact could be Model for Other States
Said Ocwen's President, Ronald M. Faris, "We're very happy that the State of Maryland is advancing our strongly held view that by preventing foreclosures, we create win-win solutions for everyone: The homeowner is able to stay in the home; lenders and investors continue to receive income; and communities remain healthy. It's productive to work hand in hand with a state government to formalize a commitment and approach to foreclosure prevention and loan modifications. We hope that more governors and states take similar action. The whole country will benefit."
In their compact, the State of Maryland and Ocwen have agreed to:
* Make every effort to identify workable solutions short of
foreclosure so that as many homeowners as possible can remain in
* Designate selected Ocwen home retention consultants as "Team
Maryland" to serve homeowners who are working with the state's
Foreclosure Prevention Assistance Network.
* Communicate the decision regarding the nature and extent of the
loss mitigation offer to the homeowners quickly.
* Accept a letter of commitment for homeowner assistance from
Maryland's Department of Housing and Community Development Bridge
to Hope Loan program as an initial payment in a loan modification
(if one is required).
* Participate in outreach efforts by attending local Maryland events
coordinated to assist homeowners in need.
Ocwen Loan Modification Program has Reduced Delinquencies, Benefiting Both Homeowners and Investors
Said Anne Balcer Norton, Director of Foreclosure Prevention at the St. Ambrose Housing Aid Center, Inc. in Baltimore, "Ocwen has provided our counselors clear instructions for the submission of loss mitigation packages in an effort to expedite the loss mitigation process...The streamlined process for submission of workout requests coupled with a direct point of contact has resulted in successful workouts for St. Ambrose clients." Added Robert Strupp of the Baltimore-based Community Law Center, "We have found that Ocwen makes a concerted effort to work with their customers, and to avoid foreclosure when possible...We are very grateful for the support Ocwen Financial Corporation has offered to our work."
So far this year, Ocwen has achieved loan workouts avoiding foreclosures for approximately 55,000 homes around the country. "We are proud to have helped so many American families during this crisis. If a customer has the ability and desire to make payments and is responsive to our communication attempts, there truly are not many homeowners we cannot help. With our technology, we remain the leader in loss mitigation, and we hope that others in the industry will follow," said Margery Rotundo, Ocwen's Senior Vice President in charge of loss mitigation operations. Since the onset of the subprime meltdown, Ocwen has increased its home retention consultant staff by 65%.
Ocwen relies on robust and scaleable technology - largely developed in-house - to manage its large and challenging subprime portfolio which includes an aggregate unpaid balance of $42 billion. Ocwen's proprietary software and expert systems allow it to identify and reach at-risk borrowers, structure customized payment plans and loan modifications and prevent foreclosures - keeping homeowners in their homes and preserving income for lenders and investors.
Servicer Cooperation with Community Groups is Essential
"Part of our effort to avoid foreclosures involves working closely with community and government groups committed to helping homeowners in trouble and mitigating the effects of the mortgage crisis," said Ms. Rotundo.
Said National Fair Housing Alliance (NFHA) Vice President Lisa Rice, "Ocwen has taken a number of steps that NFHA has encouraged and supported. Those steps include hosting, sponsoring and participating in foreclosure prevention forums and workshops, making the loss mitigation process more transparent to consumers, participating in the HOPE NOW Alliance, undertaking fair lending training, entering into partnerships with non-profit consumer advocacy and civil rights groups to promote fair lending and homeownership preservation, supporting fair lending efforts at the national and local levels and soliciting consumer advocacy and civil rights groups to participate in joint loss mitigation and homeownership preservation efforts. Ocwen is one of the few companies that participated as a sponsor and supporter of each phase of NFHA's anti-predatory lending educational media campaign."
George Goehl, Executive Director of the National Training and Information Center, said, "We believe that (our) partnership has been a success because of a deep commitment on behalf of Ocwen to working with community-based organizations to gain a different perspective on foreclosure prevention, loss mitigation and real estate owned practices."
Ocwen also works with ESOP - Empowering & Strengthening Ohio's People, National Council of Laraza, South Brooklyn Legal Services, Homeownership Preservation Foundation, Neighborhood Assistance Corp. of America, Homes on the Hill, Neighborhood Housing Services of Chicago and Dominion Community Development Corp.
Ocwen Financial Corporation is a leading asset manager and business process solutions provider specializing in loan servicing, special servicing, mortgage loan due diligence and receivables management services. Ocwen is headquartered in West Palm Beach, Florida with offices in Arizona, California, Florida, Georgia and New York and global operations in Canada, Germany and India. Utilizing our global infrastructure, state of the art technology, world-class training and six sigma processes, we provide solutions that make our clients' loans worth more. Additional information is available at www.ocwen.com.
CONTACT: Sommerfield Communications, Inc.