Apparently the news story about Ocwen was correct. Here is a link to an article in the Sacramento Business Journal.
Ocwen is a residential and commercial mortgage loan servicing company. They started in the mid 1980’s by purchasing bad debt and then engaging in aggressive collection tactics to recover money. Don’t read anything into that word “aggressive.” I’m not trying to “hint” they did anything illegal, they were just more persistent and more creative than other collection agencies.
Now, Ocwen handles a big chunk of the sub-prime home mortgage servicing market, with over $50 billion under management. It has offices in Florida, Georgia, and Washington DC, and operations centers in Mumbai and Banglore, India and a new center in Uruguay. In case you are interested, here is a “help wanted” post for the Mumbai center, with job responsibilities and compensation, and another help wanted posting with many positions available in Uruguay.
Ocwen press releases talk about their industry-leading figures for successful loan modifications. If true, it means that hundreds of millions of dollars of Treasury Dept (taxpayer dollars) incentive payments to Ocwen are going to jobs in other countries. The loss of American jobs contributes to spiraling unemployment and resulting mortgage default problems in this country. Ocwen says their lower labor costs allow them to hire more employees and provide more personalized service to mortgage borrowers who need help, and allow more people to keep their homes.
You have to be careful what you “incent” I always say. The more mortgage defaults there are, the more work for Ocwen, and the more money they make! I’m not saying Ocwen has some sinister plan to increase unemployment, I’m saying we need to give some thought to our federal incentive programs instead of just throwing money out there.
To be fair, Ocwen also recently testified to Congress regarding its recommendations to improve the efficiency of the Home Affordable Modification Program and allow more homeowners to keep their homes. I think their advice, which includes principal write-downs and other measures, is well reasoned and Congress should listen. On the other hand, Ocwen is also being sued for abuses in its servicing practices, and there is a history of problems with federal contracts. Wouldn’t life be easier if the good guys all wore white hats, and the bad guys never bought girl scout cookies?