NEW YORK (Reuters) – Ocwen Financial Corp., a large subprime mortgage servicer, on Thursday said delinquency rates on loans it manages held flat, or fell, since May in a reprieve from the subprime crisis.
Ocwen (OCN.N: Quote, Profile, Research, Stock Buzz) said falling delinquencies on loans it serviced follow so-called loan modifications, which can include cutting interest rates or forgiving principal to levels that create affordable payments. The practice is controversial among many investors but has been pushed by regulators who have claimed servicers are too slow to curb the foreclosures that are worsening the U.S. housing slump.
Easing delinquencies are the first sign of stability for Ocwen-serviced mortgages since the subprime crisis flared in 2007, said the West Palm Beach, Florida-based company. Profits at Ocwen, which collects and distributes payments on about 350,000 loans, have tumbled partly on costs of advancing payments on delinquent loans to bondholders.
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