Wiliam Erbey, angel investor and the former chair and CEO of Ocwen Financial Corporation, has met with praise by the National Community Reinvestment Coalition (NCRC) for his efforts to help in the preservation of homeownership, especially among underserved and underprivileged families across the United States.
In a letter put to paper by the NCRC’s President and CEO John Taylor, the organization gave its wholehearted endorsement to Erbey for demonstrating a strong desire to solve problems inherent to consumers in the mortgage industry.
Taylor also noted Erbey’s proactiveness in seeking to join forces with community leaders, policymakers, and financial institutions with a mind toward championing fairness and ending discrimination in lending, housing, and business.
“Approximately 15 years ago, Bill Erbey reached out to NCRC to open a discussion on ways our organizations could proactively work together to preserve homeownership in underserved communities,” explained Taylor in a letter dated back to 2016. “I found Mr. Erbey’s overture refreshing. At that time few, if any, private sector mortgage companies were willing to engage non-profits like NCRC on consumer issues.”
The NCRC, a nationwide non-profit organization aimed at promoting access to financial services, affordable housing to lower-income communities, began working closely with Erbey and Ocwen Financial Corporation over the course of the 2000s in an attempt to pioneer private sector loan servicing solutions in a manner that was favorable to the consumer.
“From the outset of our discussions, Bill listened with genuine empathy to NCRC’s perspectives on the mortgage industry and our suggestions to enhance fair dealings and customer service,” Taylor continued. “As a result of those discussions, Bill implemented a series of pro-consumer improvements to his loan servicing operations.”
The importance of the precedent that Erbey introduced by coming forward to work with NPOs on consumer issues in mortgage lending came to the fore when the mortgage crisis struck in 2008.
According to Taylor, Erbey played a key role in helping vulnerable communities and households to restructure their mortgage debt obligations in a manner that was both favorable to their individual situations while remaining secure and affordable. Ocwen, with Erbey at the helm, went on to become the very first loan servicer to take such an approach in the wake of the housing crisis, according to Taylor.
“Ocwen had not put any of the bad loans in the system, but as a loan servicer, Bill devised creative strategies to allow homeowners to keep their homes,” he explained. “Under Bill’s direction, Ocwen was the first servicer to modify the terms of mortgages to make them affordable for consumers, providing a model for federal government foreclosure prevention programs.”
Notably, Ocwen’s measures proved themselves to be most successful particularly among minority communities and low-income families, for whom the risk of foreclosure or default weighed particularly heavily during the housing crisis of 2008.
In order to provide secure and affordable debt servicing to households faced with such dire prospects, Erbey opted to take “immediate action” in order to be “part of the solution”, Taylor explained.
“Bill also provided significant support to the affordable housing efforts of community advocacy groups around the country, including NCRC,” Taylor continued. “As a result, millions of families, predominantly in minority neighborhoods, were spared the devastating impact of home foreclosure.”
While the mortgage crisis was marred by mass foreclosures, Erbey’s tactic, known as the Shared Appreciation Modification Program (SAM), successfully helped homeowners to navigate such risks by emphasizing the servicing of debt that outweighed the value of the homes themselves. This approach, in effect, managed to lessen the risk of default on principal reduction programs for many minority and low-income families during the mortgage crisis.
For this reason, the NCRC praised Erbey and Ocwen for their role in facilitating an increase in the flow of private capital into communities that had been left behind, especially during a time when such communities were even more vulnerable.
“We at NCRC applaud Bill Erbey’s leadership by example and innovative work to assist homeowners during one of the most serious financial crises in our country’s history.”