American Land Title Association
Home  >  News Room
News Room


SoftPro is the nation's leading provider of Real Estate Closing and Title Insurance software


Industry News

Freddie Mac Launches New Workout Plan for High Risk Loans

February 4, 2009

MCLEAN, Va., -- Freddie Mac 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) 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 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.

Freddie Mac plans to determine whether to broaden or modify the strategy after reviewing the pilot's June results.

Source: Freddie Mac



Print Friendly


How To Find Us:
American Land Title Association
1828 L Street, NW, Suite 705
Washington, DC 20036-5104
P. 202.296.3671 F. 202.223.5843
www.alta.org
service@alta.org
Copyright © 2004-2014 American Land Title Association. All rights reserved.
SecurityMetrics for PCI Compliance, QSA, IDS, Penetration Testing, Forensics, and Vulnerability Assessment