Ocwen Shared Appreciation Modification (SAM)? Anyone have any information on this?

[LifeisGood-KindOf]

Hello,

Does anyone know the details or have any experience with Ocwen in regards to a Shared Appreciation Modification (SAM).

Thanks.

[Cat Damiano]

Hi LifeisGood-KindOf,


Welcome to the forum and thank you for joining.........

Do you have a shared appreciation mortgage loan currently? Unfortunately, I have not seen other members with this type of loan going through the modification process.

[LifeisGood-KindOf]

No I do not currently have one but am being offered one. 2% 30 year fixed, principal reduction spread out over three years, with a 25% share of the net appreciation when the property is sold. I don't have the paperwork yet so this is all the details I have at this point.

[Cat Damiano]

Oh, ok. You are being offered the mortgage. Please let us know what the documents say. It sounds great on the surface.

[SurfwhenUcan]

Hello,

Does anyone know the details or have any experience with Ocwen in regards to a Shared Appreciation Modification (SAM).

Thanks.

Hi Life, This is the first I have heard of it in this forum. This is an idea that has been batted around since they were trying to work out a deal to pass the bankruptcy act a couple years ago. The term in bankruptcy is "clawback", as opposed to "cramdown" (I know you're not in bankruptcy, the term just comes from that arena). A guy at Forbes also blogged about it.

I remembered this product as soon as I started so see some of those new HAMP principal reductions and knew it wouldn't be far behind. IF you get the agreement, and that's a big IF with OCWEN, the language it contains would be of some real interest here. Please keep us posted.

2% fixed for the life of the loan sounds much more aggressive than OCWEN usually is.They could get much better terms (For them) under HAMP mod and they don't really care if they have to foreclose so I don't see this as OCWEN panicking and offering some deal as a stopgap for foreclosures. From a lender standpoint, some of this doesn't make sense yet to me. What were the particular aspects of your hardship that led to this result?

[robins]

We were just offered a SAM from Ocwen.
"Details are in the mail" but it was explained as a 4% fixed rate for the reminder of the original loan, HUGE prinicpal reduction, 1/3 per year for 3 years if payments are kept current and a 25% appreication share to Ocwen if property is sold after 3 yrs. Sounds like a great deal if it really is as they said. I wonder how they show or report the prinicpal reduction? Since it goes for 3 years that would be beyond Obama's debt forgiveness timeline wouldn't it?

[LifeisGood-KindOf]

Hello,

I was given something similar. Very Large Principal reduction over 3 years with a 2% fixed rate fixed for the remainder of the loan as well as a 25% shared appreciation with Ocwen when the property is sold. The principal reduction is given over the next three years on the anniversary date of the modification. I did speak with our accountant and as of right now my modification will go beyond Obama's debt forgiveness but he thinks that it will be extended as there are more and more principal reductions being given. My paperwork arrived as stated and I had our attorney review it and he was as surprised as I was. The principal reduction was in the 6 figures. Congratulations on getting a SAM. There is not much information out there about this type of modification so it is nice to see others starting to get this offer.

[robins]

Thanks for the response. I'm happy to hear that the paperwork might really "be in the mail" and it's very helpful that you have had an attorney look it over. I'm excited and hope that it really works out. We have been battling HomEq and Ocwen for a few years and this seems to be a great resolution. Do you know if the plan requires owner occupancy?

Congratulations to you and please post updates -- if they actually convert from the trial to a permanent mod, reduce the principal, how they report, etc.
Thanks again!

[LifeisGood-KindOf]

I am not sure but I think it did require owner occupancy. As far as updates there was not much I could find out until I actually received the paperwork. Once completed I sent it overnight with signature confirmation required and my first payment. Within two or three days I checked online and the payment showed posted and my new "modified" monthly payment was showing in the system. Just keep an eye on your online account as they were very quick to update my account status. After my "trial" period was finished my new principal amount was showing on the online account as well as the monthly statement I received. I was a little skeptical when I was told the paperwork was in the mail, but to my surprise it did arrive within a week. If they have told you it is on its way then I am fairly confident it is. Just make sure to get it back to them asap. They were actually very helpful in my situation and I actually received a call from them once a day to make sure that everything was progressing okay and to see if I had any questions. I have heard nothing but horror stories about Ocwen, but in my case I could not ask for any better service. I actually need to change my username to "LifeIsGreat!!" If anyone can tell me how to do it let me know.

[oceanbabe87]

Congratulations Life is Good! I was wondering if you applied for HAMP before being offered this SAM from Ocwen? Would you mind sharing your process and how you were offered this option. We have not been as fortunate dealing with Ocwen. Appreciate it!

[LifeisGood-KindOf]

Thank You. I did have to go through the HAMP application which I was denied for. As soon as I found out I was denied I located the contact emails for Ocwen here on the forum and emailed them all. About the same time I was sending emails I received a call with the offer. I chalk it up to "Luck". I do not know of any one thing or reason that triggered the offer. Within 3-4 hours of sending emails I received a call from an Ocwen employee here in the US that confirmed the offer that I had been offered earlier in the day. The only other thing I can say that I did was that I spoke to Ocwen EVERY day. Sometimes they called me and other times I called them, but I always spoke to them at least once per day, sometime two or three. Maybe they just got tired of talking to me, lol.

[oceanbabe87]

Thanks for sharing....we will apply once more and hope we have some luck. Please update here, as we are very interested to hear results related to Ocwen, especially when it is positive for a change. So glad it's worked positively for you!

[davephx]

I have thought for a long time shared appreciation mortgages should be offered. It now looks like Owens is the first but its not a new concept.

The shared appreciation mortgage was modestly popular back in the 1980s, when mortgage rates were prohibitively high.

Then around 2007, Some local housing authorities and city governments are now offering shared appreciation loans that function as a second mortgage with deferred repayment. Usually, the agency will fund a portion of the home purchase. The home buyer makes no repayment until the home is sold. At that time, the home buyer returns the original amount to the agency along with a certain percentage of the home's appreciation.

On 7/15/2010 a Patent application for "SHARED APPRECIATION LOAN MODIFICATION SYSTEM AND METHOD" and assigned to Bank of America ! The examples deal with HELOC's and a specific computer program to compute them.

In January 2011 The State of Washington in HB 1558 proposed mandating it to be offered in certain situations before foreclosure (great idea) It was proposed by Democrat Judgins.

House Business & Financial Services Committee on Tuesday, February 15, 2011. The bill authorizes (and requires) shared appreciation mortgages (SAMs). A SAM occurs when the appraised value of a home is less than the outstanding mortgage and the lender reduces the monthly payment on the loan in return for a percentage of recouped market value on eventual sale. House Bill 1558 would essentially cram down the value of underwater loans and give lenders a cut of future values. While the bill would keep homeowners in their homes, it also represents substantial accounting, tax, and safety & soundness challenges for financial institutions. A study on SAMs was part of the recently passed Dodd Frank Act, however the study has not yet been completed. Based on the Association’s initial research on SAMs, it would be difficult to impossible for a financial institution to recoup its cram-down losses through property value recoupment.

Owens on May 5, 2011 in their SEC Form 10-Q filing said:
We will continue in 2011 to roll out new initiatives designed to reduce the cost of servicing and to improve our ability to manage delinquencies and advances. These initiatives will also be designed to improve borrower customer service levels, increase loan modifications and reduce re-defaults on loan modifications. We have already begun rolling out our "Shared Appreciation Modification" which incorporates principal reductions and lower payments for borrowers while still providing some ability for investors to recoup losses if property values increase over time.

We also expect to roll out in 2011 our "Appointment Model" approach for communicating with our delinquent borrowers, which will allow borrowers to schedule a time to review their files with a resolution specialist. By allowing both the borrower and the resolution specialist to prepare for discussions in advance, we believe that the Appointment Model approach will be far superior to the two most widely used and widely criticized alternative servicing methods of (i) specifically assigned resolution specialists and (ii) randomly assigned resolution specialists.

[oceanbabe87]

Appreciate your feedback on SAM, Davephx.....not sure if we'll qualify since we have a little equity left in our property. I try to stay optimistic, but in my dealings with Ocwen, it looks like they would rather take our property. I'm making one more attempt for a modification, we'll see how it goes. Thank you for this information.

[Todayisthebest]

Congratulations Life is Good! I was wondering if you applied for HAMP before being offered this SAM from Ocwen? Would you mind sharing your process and how you were offered this option. We have not been as fortunate dealing with Ocwen. Appreciate it!

Hi Lifeisgood-kindof,

I was wondering if you could tell me how I can access all ocwen emails. The bank has schedule a sale on my home in about 7 days. Thank you so much!

[LifeisGood-KindOf]

I found the email list here on this forum. Some of the email addresses are no longer valid but I do not remember which ones. Just send an email to all of them. I had someone from the ombudsman office call me the same day I sent the email so make sure you send an email right away. Hope this helps and Good Luck. ombudsmanweb@ocwen.com; rapidresolution@ocwen.com; William.Erbey@ocwen.com; David.Gunter@ocwen.com; mzeidman@ocwen.com; Barry.Wish@ocwen.com; William.Shepro@ocwen.com; Ronald.Faris@ocwen.com; Paul.Koches@ocwen.com

[Todayisthebest]

Thank you so much, Lifeisgood-kindof!!!!

[Cat Damiano]

Hi Todayisthebest,



Welcome to the forum and thank you for joining............


I had posted that email list a long time ago here on the forum and there are only a few that are still with Ocwen.

You can also call the CEO Bill Erbey's office directly at 1-561-682-8520

and here are a couple more emails that I added:
rapidresolution@ocwen.com
Barry.Wish@ocwen.com

[Todayisthebest]

Thank you so much, Cat Damiano. The emails: rapidresolution@ocwen.com
Barry.Wish@ocwen.com were undeliverable. I'm going to call the CEO Bill Erbey's office. That's a great idea! Thanks again!

[Cat Damiano]

OK, thank you, I didn't even notice that the rapid resolution was already on my list lol, like I stated, it has been a long time. I will remove them from the list. Good Luck with the CEO's office.

Also here is the number directly to the Ombudsman.
1-800-390-4656: Ombudsman Office

[Todayisthebest]

This is great! Thank you so much!

[Todayisthebest]

Hi Cat Damiano, I just finished talking with Ombudsman and he was very helpful. He is going to call me in a couple of days and will try to help me find a loan modification that works for me.

Thank you so much for all this info!

[Cat Damiano]

No problem, we are here to help. Please keep us posted on how it goes.

[Todayisthebest]

I will make sure to do that, Cat Damiano. Thank you again!

[Todayisthebest]

I will make sure to do that, Cat Damiano. Thank you again!

I received the loan modification agreement from Ocwen, with a 2% interest rate for 5 years, after the 5 years, it will go up to 4.5% for the remaining of the term of the loan (40 years). To my surprise, $100K was added to the principal balance of the loan! I couldn't believe it when I read that. How are we going to get out of debt ever under these terms? This is just unbelievable. My home is worth about a third of this loan because it has had severe damage due to natural disasters. I signed and accepted the agreement and sent the required payment because I felt I had no choice. My home had a schedule date of sale the next day. What can I do now? Can I refuse this offer and try to get a Ocwen Shared Appreciation Modification? I'm afraid because it had already a sale date. Can someone, please, give me some advice. Thanks a lot!

[davephx]

Unless you were behind by $100k in payments makes no sense. Maybe combined a 2nd with the 1st and redid all?

But otherwise they should explain to you the added principal.

Unless the $100k is simply the total you will pay which includes interest for the next 40 years, which may be required in the financing statement. That would make sense.

[Mudogz]

@ Robin...did you ever indeed get your documents? I was offered a similar modification and I just got mine. I was just wondering if you had anyone such as an attorney review it to make sure it sounded beneficial?

Everyone who I've spoken to said it does sound like a good deal. The only drawback would be if the actual property increases excessive in value or the fact that you may not be able to refinance due to the "balloon disclosure."

Thanks,
Mudogz

Thanks for the response. I'm happy to hear that the paperwork might really "be in the mail" and it's very helpful that you have had an attorney look it over. I'm excited and hope that it really works out. We have been battling HomEq and Ocwen for a few years and this seems to be a great resolution. Do you know if the plan requires owner occupancy?

Congratulations to you and please post updates -- if they actually convert from the trial to a permanent mod, reduce the principal, how they report, etc.
Thanks again!

[robins]

Hi Mudogz,

Yes, we did receive the paperwork and it was just as they had said. I took it to our real estate attorney and he said "sign it, quickly". It's a very good deal for us. They not only discounted our principal balance (over a 3 yr period assuming we are not 30 days late more than 3 times in any 12 mo period) by hundreds of thousands of dollars (yes, hundreds of thousands), they gave us what we feel is a more than fair current valuation. I have concerns over IRS issues with debt relief but even if we end up paying tax on the forgiveness we are still about $250000 ahead.
It makes sense for Ocwen as well as the amount they were requesting as a opening bid at the planned trustee sale was about the same amount as what they gave us for the valuation. Now they get monthly payments and 25% of any appreciation, don't have to hassle the foreclosure and they look good. Also since they 1099 the forgiveness they really don't lose anything.

As far as refinancing, that could be a little tricky, but still very do-able. I was instructed to request a payoff amount after a couple of payments had been made and see what figure they come up with. According to the docs, the entire deferred balance should be deducted but that seems a little too good to be true. The increase in value is not a bad thing. Yes, they get 25% of it, but you get 75%! They never get more than they are deducting in the first place.

Good luck to you.

@ Robin...did you ever indeed get your documents? I was offered a similar modification and I just got mine. I was just wondering if you had anyone such as an attorney review it to make sure it sounded beneficial?

Everyone who I've spoken to said it does sound like a good deal. The only drawback would be if the actual property increases excessive in value or the fact that you may not be able to refinance due to the "balloon disclosure."

Thanks,
Mudogz

[Mudogz]

Thanks for your response Robins. Same here, we got our and signed and returned them. Just waiting for the modification to take effect. How long ago did you get your loan modified?

Regarding the payoff amount, my documents state they will only deduct the payments made within the forbearance period from the payoff amount and NOT the entire amount. After 1 year, they will reduce the principal by 1/3 of the forbearance and any payments made that 2nd years. Hope this helps.

Question, have you pulled your credit report after this modification? How has it affected it? I've been hearing mixed feedback from various sources but many say it all depending on the bank and how they choose to report it.

I appreciate your help.

Regards,
Mudogz

[Mudogz]

Many people will find this useful. Here is the # to the Home Retention Center in Orlando. 800-804-5455 I'm not sure why they don't post this, but they were much more helpful and knowledgeable than the India call center. Another option which I found useful is to press "Spanish" on the prompt and they'll transfer you to Uruguay. When the agent picks up they'll speak in Spanish. Ask to speak to someone in English and they will connect you to someone in their office which definitely was more knowledgeable than the agents in India. No offense to the India call center, but I don't think they are well trained at answering the questions the mortgage holders have. Hope this helps!

[interesting...]

Is this just HAMP PRA, with a 25% stake written in??

[Mudogz]

SAM is an in-house modification which the bank and service offer the lenders. HAMP is a government program that was approved by President Obama. There are specific guidelines and criteria which need to be met in order for you to be able to qualify for these. I do believe that in order for you to be considered for a SAM modification, you need to have been denied for the HAMP.

Is this just HAMP PRA, with a 25% stake written in??

[interesting...]

yeah, but that 3-year principle reduction is straight out of the HAMP PRA program methinks... I wonder if they'll try to get that kickback even though it's an in-house.

[interesting...]

at 21 cents or so on the dollar, (hamp compensation) they'd get some good cash for that $100k+ principle reduction.

[Mudogz]

at 21 cents or so on the dollar, (hamp compensation) they'd get some good cash for that $100k+ principle reduction.

I began the process in mid-may and after literally hundreds of phone calls, which I recorded, faxes, and e-mails, my loan was finally modified! To be honest, I didn't think this would be done because I literally went through hell dealing with OCWEN. I'll be more than happy to provide anyone with help if possible, as to what I had to do to get it.

[interesting...]

I began the process in mid-may and after literally hundreds of phone calls, which I recorded, faxes, and e-mails, my loan was finally modified! To be honest, I didn't think this would be done because I literally went through hell dealing with OCWEN. I'll be more than happy to provide anyone with help if possible, as to what I had to do to get it.

Did it end up as HAMP PRA or did they reckon 25percent down the road would be more than 2 cents on the dollar forgiveness?

[Mudogz]

It actually isn't a HAMP Mod as I did not qualify for it due to my income. It's an "in-house" modification which had to be approved by the investors/owners of my loan. It has a 25% stipulation but that is much better for me because it now allow me to put my properly on the market for a reasonable price. QUOTE=interesting...;354678]Did it end up as H


AMP PRA or did they reckon 25percent down the road would be more than 2 cents on the dollar forgiveness?[/QUOTE]

[Did that really happen?]

We were turned down by HAMP because we made to much income and called OCWEN to discuss options once we got the rejection HAMP letter. We were put on hold from the India call center and the guy came back and said Congratulations, you have been offered a modification from Ocwen and the paperwork is in the mail (a few days prior to this call apparently). It showed up in our mailbox and as a few describe-it is a SAM with all the details mentioned here already. But it did include a Balloon Disclosure, which I'm wondering is necessary as the legal document for Shared Appeciation (25%)-because essentially a large amount would be due upon refinance or sale. Does anyone happen to know about this? Anyways-it was really an unexpected surprise for us-as we were thinking we would have to keep our same mortgage nightmare and come up with a bunch of money to bring us current. Almost seems to good to be real...

[Did that really happen?]

Robin..did you have a balloon disclosure in your packet?

[Mudogz]

Robin..did you have a balloon disclosure in your packet?

I actually had 2 attorneys review my contract. I'm not sure if you have the same one as me, but we were told it is standard. You NEED TO MAKE SURE THAT A BALLOON "FEATURE" is not part of your modification. If you "do not" have a balloon feature as part of it, you can feel free to sign the "Balloon Disclosure." Basically what this means is if you decide to stay in your house until the loan matures (i.e. 30 years), the agreement you have signed up states that OCWEN or the owner of the loan is entitled to up to 25% of the appreciated value. In essense, if you DO NOT sell the house by the time the loan matures, then OCWEN or the owner of the loan (i.e. investor) will at that point in time conduct an appraisal and ask for 25% of whatever the appreciated value is at that moment. For instance, if your modified loan is $100K and after 30 years it now is worth $150K, then you will owe OCWEN $12,500 (25% of $50,000 appreciation) and all of it has to be paid in one lump sum (hence the purpose of the term "balloon" in the disclosure) all in one shot. You have the option of refinancing or taking out another loan to pay this $12,500 in order to get the lien release. That's just a hypothetical example. Hope this helps. Don't wait too long to get in your documents because I know people who were not offered a 2nd chance after their deadline was passed.