As we wrote late last year we should expect anything as Obama & Co try everything to keep delinquent homeowners in their homes. Their conduit will be Fannie/Freddie - many of these programs will be ill fated and lead to another round of defaults (kick the can policies) which will cost us more in the end. But that's a worry for another day.
Just remember, to get all the goodies the government is going to unleash on America you must be at least 60 days late. That's not going to cause a rush of now "on time" borrowers to go delinquent. Nope. No unintended consequences here.
Today's policy as outlined below... which is moving Ocwen
- Freddie Mac (NYSE: FRE - News) said today it is piloting a new Workout Strategy For High Risk Loans designed to keep more at-risk borrowers in their homes by employing third party servicers that specialize in servicing Alt A and other types of higher risk mortgages.
- "A workout strategy is only as successful as the number of knowledgeable counselors available to answer the phone. Our strategy for high risk loans is designed to help servicers cope with today's unprecedented call volume by directing calls to a specialist with the specific staff and technical resources for handling a high volume of borrowers with these types of mortgages," said Ingrid Beckles, Freddie Mac's senior vice president of default asset management.
- Under the new pilot, a selected portfolio of higher risk mortgages that are at least 60 days delinquent will be given to a specialty servicer for intensive attention using the full range of Freddie Mac workout opportunities, including the Streamlined Modification Program developed with the Federal Housing Finance Agency, Fannie Mae and the HOPE Now Alliance.
- Ocwen Financial Corporation (NYSE: OCN - News) is one of the servicers Freddie Mac has selected for the pilot. Ocwen will deploy teams of specially trained counselors to handle Freddie Mac's delinquent high risk mortgages in order to minimize telephone wait times, put borrowers in touch with live counselors faster, and implement the latest Freddie Mac foreclosure reduction policies more quickly.
- Initially, the pilot will target an estimated 5000 reduced documentation loans from California, Nevada and other states with high delinquent rates. Although Alt-A loans were made to borrowers with strong profiles and represent a fraction of Freddie Mac's single family portfolio, they account for half of its seriously delinquent mortgages.
The gubberment is here (again). We're saved (again)! Groundhog Day at the Casino.
[Jan 9: Bookkeeping - Starter Position in Ocwen Financial]
Long Ocwen Financial in fund; no personal position