Freddie Mac launches new workout plan for high-risk loansMortgagePress.comFreddie Mac, Workout Strategy for High Risk Loans, Ingrid Beckles, Federal Housing Finance Agency, HOPE Now Alliance, Ocwen Financial Corporation
Freddie Mac said that 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
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 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.
"We applaud Freddie Mac's leadership in foreclosure prevention
and are delighted to support this innovative initiative," said
William Erbey, Ocwen's Chairman and CEO. "We bring the technology
and processes that now achieve successful workouts in the
overwhelming majority of delinquent loans in our servicing
portfolio. Our goal is and will continue to be to engineer workouts
that keep homeowners in their homes and return greater cash flow to
the loan owner than the proceeds from a foreclosure a win/win
situation for American homeowners and taxpayers alike."
Initially, the pilot will target an estimated 5,000 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
Freddie Mac plans to determine whether to broaden or modify the
strategy after reviewing the pilot's June results.
For more information, visit www.freddiemac.com.