The Law Offices of Michael Gaddis recently obtained a final Ocwen Loan Modification for a homeowner located in Bonita, CA. Every loan modification file has a story and this one was no exception. The Ocwen loan had two borrowers, a brother and a sister. The sister lived in the house with her husband while the brother was merely a co-signer. The brother had nothing to do with the house other than his name was on the loan. The sister and the husband lived in the house and paid for everything. The homeowner’s situation was further complicated by the fact that both she and her brother were self-employed. Not only were they self-employed but they owned several small restaurants that were each incorporated as S-Corps. The brother also owned numerous other properties which only added to the complexity of the situation. In order to obtain a loan modification for the homeowner Michael Gaddis had to get Ocwen to take the brother out of the equation entirely and then simplify the homeowner’s financial situation in order to make it as easy as possible for the Ocwen underwriter to process.
Ocwen is one of the better servicers out there. They typically run homeowner’s through HAMP first and if that fails they run the homeowner’s through their in-house modification program. In Michael Gaddis’ opinion, Ocwen’s in-house modification program is the BEST in-house modification program of any servicer. Homeowners that have Ocwen get at least 2 really good opportunities for a thorough loan modification review. There is a reason why Ocwen has continued to grow, they seem to get it.
Michael Gaddis was successful in getting Ocwen to disregard the co-borrower brother and also successfully presented the homeowner’s loan modification application to Ocwen’s underwriting department. Simplifying the homeowner’s financial situation and breaking it down along with thorough explanations cut down the time needed by the underwriter to digest an otherwise overwhelming loan modification package and provided the underwriter with a concise view of what was occurring. Loan modifications are mostly won and lost during underwriting so helping the underwriter understand what is going on goes a long way to achieving loan modification success.
In this situation Ocwen deferred $189,926.53 of the principal balance and treated this deferred principal balance as a non-interest bearing principal forbearance. Ocwen went further and agreed to forgive $119,926.53 of the deferred principal balance over the course of three (3) years. Provided the homeowner is current on their payments Ocwen agreed to forgive 1/3 of the $119,926.53 in equal installments on each of the first three (3) anniversaries of the loan modification. In other words, if the homeowner remains current for the first three (3) years Ocwen will forgive the entire $119,926.53 by the end of the third year leaving a remaining deferred principal balance of only $70,000.00 which will act as a balloon and will become due and payable at the end of the loan. Ocwen went further and provided the homeowner with a fixed 2% interest rate for the life of the loan which resulted in a principal, interest, taxes and insurance (“PITI”) payment of $1,798.35 resulting in an over $1,300.00 per month reduction from what the homeowner was paying PITI prior to becoming delinquent.
As always, Michael Gaddis and his staff will continue to monitor the homeowner’s file in order to ensure that 1) the final Ocwen Loan Modification paperwork is received by Ocwen; 2) Ocwen properly uploads the modified terms into their system; and 3) Ocwen returns the homeowner’s file to regular servicing. If you would like to see a copy of the Ocwen Loan Modification referenced in this article or review other loan modifications obtained by Michael Gaddis please click the following links: http://californialoanmodificationattorney.com/approved-loan-modifications-and-trials/ and http://californialoanmodificationattorney.com/trials-modifications/approved-trials-modifications-pg-2/.