Maryland Teams With Servicer to Reduce Foreclosures
Ocwen Financial Corp. (OCN), a West Palm Beach-based subprime mortgage servicer, on Monday announced it had signed a compact with Maryland Governor Martin O’Malley to reduce foreclosures and keep homeowners in their homes. The compact utilizes Ocwen’s technology-enhanced program of modifying loans that are delinquent or at risk of becoming delinquent. “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,” Margery Rotundo, vice president in charge of Ocwen's loss mitigations operations, said in a media statement. The State of Maryland and Ocwen in the compact agreed to work toward identifying workable solutions to keep people in their homes and to recruit Ocwen home retention consultants to a "Team Maryland" that will serve Maryland homeowners currently within the state's Foreclosure Prevention Assistance Network. The agreement also requires communication on any decisions regarding the nature and extent of loss mitigation efforts offered to homeowners, for Ocwen to work with Maryland's Department of Housing and Community Development Bridge to Hope Loan program in loan modifications and to participate in outreach efforts by attending local Maryland events coordinated to assist homeowners in need. Ocwen reported in September it's loan mod program contributed to a decline in delinquencies in the most recent quarter. Ocwen services approximately 341,000 mortgages — 7,072 in Maryland — 85 percent of which are subprime, according to a press statement. The agreement with Maryland aims to help the thousands of Ocwen-serviced mortgages in Maryland and ultimately aid the state's economy through loan modifications. "The homeowner is able to stay in the home; lenders and investors continue to receive income; and communities remain healthy," Ocwen president Ronald Faris said. "We hope that more governors and states take similar action. The whole country will benefit." The Baltimore Sun reported late last week that the O'Malley was also in talks with Litton Loan Servicing LP regarding a possible modification compact. The governor's office had not yet released any information Tuesday and could not be reached for comment before this story was published. The governor in February announced the adoption of emergency regulations, including a requirement that mortgage loan services disclose their efforts to help homeowners facing default and foreclosure. The governor also announced in February that Ocwen's operations had come under state investigation and faced a possible operating license revocation within the state. “Everyone in the mortgage industry has said they want to help homeowners avoid foreclosure. We want to ensure their actions are matching their words,” Department of Labor, Licensing and Regulation Secretary Thomas Perez said. “This data collection will shine a bright light on servicers, and will help DLLR help homeowners.” Later in April, the governor signed emergency legislation that would "significantly lengthen" the foreclosure process by requiring a lender to wait 90 days after default before filing foreclosure action. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.