NEWS FROM FREDDIE MAC
FOR IMMEDIATE RELEASE
FEBRUARY 3, 2009
CONTACT:
BRAD GERMAN, FREDDIE MAC (703) 903-2437
FREDDIE MAC LAUNCHES NEW WORKOUT PLAN FOR HIGH RISK LOANS
McLean, VA -- Freddie Mac (NYSE:FRE) said today it 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.
Freddie Mac was established by Congress in 1970 to provide
liquidity, stability and affordability to the nation's residential
mortgage markets. Freddie Mac supports communities across the
nation by providing mortgage capital to lenders. Over the years,
Freddie Mac has made home possible for one in six homebuyers and
more than five million renters.
# # #
-----------------------------------------------------------------------
