Ocwen Financial (OCN) Reports Completing 44.6% of Industry's Permanent Mortgage Modifications in Initial Months of U.S. Treasury's Hamp Program

October 12, 2009 12:56 PM EDT

Ocwen Financial Corporation (NYSE: OCN) reports that almost half of the trial mortgage modifications converted to permanent modifications for distressed homeowners under the Treasury Department's Home Affordable Modification Program (HAMP) are attributable to Ocwen Loan Servicing, LLC, the principal subsidiary of Ocwen Financial Corporation. There are 27 large banks and loan servicers participating in HAMP, but Ocwen alone completed 44.6% of all of the permanent modifications done by the industry.

According to a report released last week by the Congressional Oversight Panel monitoring the government's Troubled Asset Relief Program (TARP), only 1.26% of trial modifications under HAMP were able to convert to permanent status as of September 1, 2009. Ocwen, however, converted 13.9% of its customers' trial modifications during that timeframe, and its conversion rate is now over 20% and climbing.

Servicers collect HAMP incentive fees only for modifications that convert to permanent status. To convert, the servicer must obtain and verify all documentation required of the homeowner under HAMP guidelines and receive three monthly payments on the modified loan during the trial period. The converted modifications can also generate second- and third-year bonus fees for servicers, assuming the loans continue to perform.

[SM]

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