Ocwen Converts 66% of HAMP Trials to Permanent Modifications
Ocwen Financial Corp. (OCN) pushed 66% of its Home Affordable Modification Program (HAMP) trial modifications through to permanency, Paul Koches, a vice president at Ocwen told HousingWire. Since HAMP launched in March 2009, the US Treasury Department allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. According to the latest Troubled Asset Relief Program’s transaction report, Ocwen receives a potential $655m in capped incentives under HAMP. Through October, Ocwen started three-month HAMP trial modifications on 11% of its eligible portfolio. Of the 67,912 loans in that portfolio, Ocwen has 7,636 active trial modifications. “The trials that have been in progress long enough to be able to be converted into permanent mods, i.e. we collect the first month’s payment and you have to give another two months in order to give the probation, of those we have converted 66% thus far and that number is only going to go up,” Koches said. Koches added that, from what he could tell, the conversion rate for the rest of the industry is in the single digits. A report from the Congressional Oversight Panel (COP), which reviews and reports on actions taken by the Treasury, questioned the permanence of HAMP modifications and stated that of the 500,000 trial modifications started as of October, 1,711 made it to permanency. A spokesperson at JPMorgan Chase (JPM), which started HAMP trials on 32% of its eligible portfolio through October, according the Treasury progress report, told HousingWire the company could not yet release numbers on its permanent conversions. A spokesperson for the Treasury told HousingWire that it will begin including permanent conversions in its December HAMP progress report. “It’s so low because so many trial mods are going off on verbals without the proper documentation,” the executive said. “It’s about sustainability. You can’t just throw spaghetti against the wall and hope something sticks. It’s about getting down to the nitty-gritty.” Write to Jon Prior.