For the last few years, it’s been tough to wrangle that kind of cooperation.
But now, Ocwen Loan Servicing is formally rolling out its Shared Appreciation Mortgage Program. This is also known as SAM.
This is a unique (although not new) approach that the nation’s top mortgage servicer first tested in Illinois, following the housing crisis. Now, it’s being implemented in 32 other states, including Florida.
Of course, you still need an experienced Miami loan modification lawyer on your side.
In fact, our Miami mortgage modification attorneys have negotiated a number of claims on behalf of clients in South Florida to ensure they will pay principal on the fair market value of their home, rather than the inflated price they purchased it for. That kind of experience is critical when you’re going head-to-head with a large corporation. We know how Ocwen operates. We know how to make sure you’re going to get the best rate possible out of the deal.
We’ve previously explained SAM loans on our Miami Foreclosure Lawyer Blog, but for those who might have missed it, it’s basically this:
If you’re underwater on your mortgage, Ocwen will reduce your principal payment to 95 percent of the home’s current value. Then over a period of three years, the amount that the loan was reduced by is forgiven, assuming you remain current on your payments. then after that, if you sell or refinance your home, you keep 75 percent of the appreciation value, while the rest will go to the investor. If the home gets sold before the three-year period is up, the portion that was written-down is still forgiven because the bank doesn’t expect that the housing market is going to see any real rebound in the next few years.
What this does is essentially give people positive equity in their home. The theory is this is not only good for the homeowner personally, but for the investor and the economy as a whole.
What’s telling, however, was a quote given by Ocwen’s general council recently in the Chicago Tribune. What he said was basically that homeowners fight and try to save their homes – “Herculean efforts” he called them. And yet, they see no returns. So underwater homeowners get to a point where they stop trying because they feel hopeless. He said that what this measure does is give them “some sliver of positive equity.” A sliver.
Now, sometimes, that’s all people might need in order to get back on their feet. However, you may be entitled to more than that, depending on the circumstances of your case.
That’s why it’s important that you don’t try to negotiate with Ocwen – or any bank – directly about these matters.
When the bank tested the program in Illinois last year, about 80 percent of borrowers who were offered the program accepted it. Since then, about 3 percent have defaulted, but the rest have stayed current.
Ocwen estimates that roughly 65,000 of the nearly half a million mortgages it services are underwater and at least one month behind on payments.
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.