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					                                                                                              Sep 2007




               KEEPING YOU CURRENT WITH THE MORTGAGE OUTSOURCING INDUSTRY

                             LOOKING INTO       INDUSTRY
ABOUT OCWEN        EVENTS
                              THE FUTURE         UPDATE
                                                                        INDUSTRY UPDATE


                                                                     President Bush Discusses
                                                                     Homeownership Financing
In our pursuit to bring you the latest updates, company
news and best practices in the mortgage industry, we           THE PRESIDENT: First, we're going to
have compiled this issue of Live Wire.                         work to modernize and improve the
                                                               Federal Housing Administration -- that's
Please send us your feedback for incorporation in future       known as the FHA. The FHA is a
issues.                                                        government agency that provides
                                                               mortgage insurance to borrowers
                                                               through a network of private sector
Industry News                                                  lenders. Sixteen months ago I sent
                                                               Congress an FHA modernization bill that
                                                               would help more homeowners qualify for
      CAMB Proposes Solutions to Mortgage Crisis:             this insurance by lowering down-
       The California Association of Mortgage Brokers          payment requirements, by increasing
       (“CAMB”) has come up with several proposals that        loan limits and providing more flexibility
       it says represent solutions to the current mortgage     in pricing. These reforms would allow
       market crisis for consumers. Speaking at a news         the FHA to reach families that need
       conference at the group's annual convention in          help, those with low incomes and less-
       Long Beach, Calif., Ed Smith, its vice president of     than-perfect credit records or little
       government affairs, said the CAMB urges Servicers       savings. Last year the House passed
       to offer flexible repayment strategies for borrowers    this bill with more than 400 votes.
       facing default and foreclosure, calling it an           Click here to read more
       "extremely important issue for homeowners in
       California." The CAMB repeated its past call for
       Congress to declare California to be a "high-cost"          LOOKING INTO THE FUTURE
       state for homeownership. (presently, the only two
       states with that designation are Alaska and Hawaii.)    “The next wave of transformation for
       The group also called for Wall Street to develop          financial transaction processing
       lending programs and products attractive to                     industries” – Part 8
       investors and accessible to borrowers. "As has
       been the case throughout history, markets fluctuate         How will companies stretch their
       but they always recover," CAMB president Pete           resources to cover the necessary
       Ogilvie said. "CAMB stands ready to work                investments?
       collaboratively     with   regulators   and     other
       stakeholders to stimulate a strong rebound."                 The build vs. outsource decision will
                                                               change as more industry specific
      Mortgagebot Releases '07 Benchmark Study                outsourcing       capabilities   become
       Offering useful insights into the realm of consumer-    available and as the historical bias
       direct, Web-based mortgage lending, Mortgagebot         toward doing processes internally shifts
       LLC, Mequon, Wis., has announced the release of         toward outsourcing.         The basis of
       its Benchmarks 2007 study of online lending             decision-making will be based on the
       practices. The study showed that a quarter of the       following factors:
       lenders studied "now originate more than half of            1. The ability to produce and
    their loan volume via the online channel." Research      automate processes is increasing along
    participants include 25 of the top 100 banks and         with the emerging ability to swiftly take
    thrifts and 40 of the top 100 credit unions.             work outside of corporate boundaries
    Confirming trends and "debunking" some myths,
                                                                 2. The      ability  to     increase
    the study offers detailed data analysis of loan
                                                             globalization and sophistication of
    product and decision-making statistics, online
                                                             technology solutions increases the
    borrower behavior and website usage, lender
                                                             investment that can be made to reduce
    website configuration and marketing, and more.
                                                             the costs and error rates of financial
    The study showed that online loan seekers tend to
                                                             processes, thus raising barriers to entry
    be young, affluent, and creditworthy, with an
                                                             and ROI’s in these businesses.
    average income above $85,000 and an average
    credit score above 700. The study is based on a                   This emerging decision-making
    comprehensive survey and analysis of the online          paradigm supports the view that
    lending practices and procedures at more than            financial transaction processes will
    3,600 mortgage lending websites maintained for           increasingly be performed by an
    Mortgagebot's more than 700 clients nationwide.          emerging class of companies that will
                                                             specialize in providing financial services
   HUD to Implement FHA RBP System: To                      in a factory environment. The need
    augment its recently announced FHASecure                 exists, the means to satisfy the need
    program, the Department of Housing and Urban             exists, and the companies that will
    Development (“HUD”) plans to take administrative         satisfy those needs will emerge. We
    action to implement a risk-based pricing system by       now turn to an example from one such
    Jan. 1 so the Federal Housing Administration can         company.
    price its mortgage insurance premiums based on a              By: Mickey Linn, Member of the Board
    borrower's risk profile, according to a senior HUD       of Directors, Ocwen Financial Corporation
    official. With risk-based pricing, the FHA would be
    able to help an additional 20,000 subprime
                                                             To be continued…
    borrowers refinance into new FHA-insured
                                                             Top
    mortgages in fiscal year 2008 and help finance
    120,000 new homebuyers who have fewer options
    due to the contraction in subprime lending, the                     INDUSTRY EVENTS
    official told reporters. The Bush administration still
    wants Congress to pass an FHA reform bill that
    would give the agency even more flexibility in             USFN Fall Regional Default Servicing
    setting premiums and down payment requirements.             Seminar
    HUD estimates that the FHA will refinance 101,000           Sep 19 – 21, Huntington Beach, CA
    subprime borrowers into FHA loans by the end of             More info
    this fiscal year (Sept. 30) and the agency would
    probably refinance another 160,000 subprime                 IMN Subprime ABS
                                                                 September 19 -20, Four Season’s
    borrowers in fiscal 2008 without any changes to its          Hotel, Las Vegas, NV
    program. With the FHASecure program (which                  More info
    allows the FHA to refinance delinquent borrowers
    and risk-based pricing), HUD expects that the FHA           MBA 94th Annual Convention & Expo
    can help another 80,000 troubled borrowers avoid             October 14 – 17, Hynes Convention
    foreclosures. However, it could do even more if              Center, Boston, MA
                                                                More info
    Congress passes FHA reform. HUD officials
    revealed that they plan to issue a Real Estate
    Settlement Procedures Act proposal in January            Top
    aimed at improving disclosures of mortgage broker
    fees and settlement costs.
                                                                         ABOUT OCWEN
Company News

   Carteret Uses Tech to Enhance Loan Quality:
    Carteret Mortgage Corporation will deploy credit      We Make Your Loans Worth More™
    analysis technology to all its 300 branches to
    raise the bar on doing quality originations.
    Specifically, Carteret will use Market Kinetix's     Ocwen Financial Corporation is a
    patent-pending credit analysis software solution     leading business process outsourcing
    Deal Maker Score. The application provides step-     provider to the financial services
    by-step directions to raise a borrower's credit      industry, specializing in
    score. A mortgage originator downloads the
                                                              Loan servicing;
    borrower's credit findings to the product, and the
    program produces a customized set of                      Mortgage fulfillment; and
    recommendations, which show a borrower how to
    raise their credit score by the target number of          Receivables management
    points designated by the loan officer.                     services.
                                                         Ocwen is headquartered in West Palm
   Ginnie Mae introduces HECM: Ginnie Mae is            Beach, Florida with offices in Arizona,
    introducing the Home Equity Conversion Mortgage      California, Florida, Georgia, Illinois and
    (“HECM”), Mortgage-Backed Securities (HMBS)          New York and global operations in
    program, effective September 1, 2007, and            Canada, Germany and India. Utilizing
    thereafter. Ginnie Mae’s HMBS are standardized       our global infrastructure, state of the art
    mortgage-backed securities (MBS), which are          technology, world-class training and six
    collateralized by FHA insured HECM loans. The        sigma processes, we provide solutions
    HMBS is a new class of Ginnie Mae security           that make our clients’ loans worth more.
    backed by HECM loan participations under the         Additional information is available at
    umbrella of the Ginnie Mae II Custom Program. On     www.ocwen.com.
    September 1, 2007, additional information on
    HMBS program and related updates to Ginnie           Top
    Mae’s Mortgage-Backed Securities Guide 5500.3,
    Rev. 1 ("MBS Guide") will be made available under
    the "What’s New" section of Ginnie Mae’s website.
                                                         PUBLICATIONS IN THE MORTGAGE
   Tavernier Capital Partners and WESTCAP CORP                    INDUSTRY
    Choose REALSynergy: Tavernier Capital Partners
    LLC, Tampa, and WESTCAP CORP, Irvine, Calif.,                        Scotsman Guide
    chose West Palm Beach, Fla., based Ocwen
    Financial Corp.’s REALSynergy as their commercial        Scotsman Publishing Inc. is a privately
    loan servicing technology platform. REALSynergy is       held company that has served the
    a Windows-based full service commercial and              mortgage lending industry since 1985. In
    multifamily loan servicing system.                       December 1994, the company created
                                                             Scotsman Guide to serve the mortgage
                                                             industry in the Pacific Northwest.
Best Practices                                               Gradually, they expanded distribution of
                                                             the publication throughout the United
     How to Work with Buyers who have had a                 States. In April 2001, Scotsman
    Bankruptcy or Other Credit Issues: If a person is        Publishing Inc. purchased Commercial
    in the position of considering filing for bankruptcy,    Lender Magazine and merged it with
    that person's credit is probably already ruined. The     Scotsman Guide. This purchase greatly
    person can't pay his or her debts, is behind on many     expanded the commercial lending
    payments, and/or doesn't have enough assets to           portion of Scotsman Guide. In
    cover the debts. Therefore, it's not the bankruptcy      December 2001, they began publishing
    that "ruins" a person's creditworthiness; it's the       separate commercial and residential
    situation that warrants the bankruptcy that's the        editions
    problem. Information about a bankruptcy usually
    stays on a person's credit report for ten years. And a   For more information about Scotsman
    person must wait at least six years from the date of     Guide      please      log      onto
    discharge before filing another bankruptcy.              www.scotsmanguide.com
    Click here to read more
                                                             If you have specific questions or
                                                             suggestions, please write to us at
                                                             livewire@ocwen.com



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