Ocwen’s Unusual Loan Mods Easing Its Financial Burden

Servicing

Ocwen Financial Corp. is again helping itself financially by cutting distressed homeowners an unusual break.

The West Palm Beach, Fla., servicer has expanded a program offering shared appreciation loan modifications, in which the mortgage holder reduces a borrowerÂ’s principal in exchange for a percentage of future appreciation. The idea has been around for some time. Most servicers have failed to persuade the largest banks and investors to reduce principal because of the potential for fraud and moral hazard.

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