I had a great chat this afternoon with Bill Erbey, the CEO of Ocwen, one of the largest servicers of subprime loans. We talked at length about what it’s like to be in the loan modification business these days. I’m writing a story, and I don’t want to get ahead of myself, but I can’t resist sharing one piece of data.
Erbey was talking about how Ocwen is going back and redoing all the legwork to figure out what sorts of income and assets people really have, as part of the process of figuring out what they can really afford. Erbey didn’t use the word “lie,” but I’ll go ahead and do that for him. Lots of people—either buyers or their mortgage brokers—lied about that sort of thing. And, as it turns out, other things, too. When I asked Erbey what percentage of the loans Ocwen services are investment properties, he laughed. The company had been under the impression that figure stood at about 6%. Actually, it’s closer to 17%.
Barbara!