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88 FLORIDA Risk of Default is Rising for New Mortgages Risk of default among mortgage borrow- ers is on the rise, especially on loans being written right now, according to data from University Financial Associates. UFA's latest default risk index for Q2, which measures the risk of default on newly originated prime and nonprime mortgages, ended at 112, up from Q1's 109. "Under current economic conditions, in- vestors and lenders should expect defaults on loans currently being originated to be 12 per- cent higher than the average of similar loans originated in the 1990s," the report stated. at comparison is significant when looking at UFA's graph of default risk since 1990, and seeing that the trends of the past four years closely resemble those between 1990 and 1994. e takeaway for investors and lenders, according to Dennis Capozza, founding principal at UFA, is that there is a continuing upward trend in the risk of default for both prime and nonprime mortgage loans. While low unemployment rates are benefiting the mortgage market and low interest rates are fueling a buying spree, the lending risks in newly originated mortgages are increasing along with the maturity of the economic cycle. "Mortgage risks are continuing to increase as this economic cycle matures," Capozza said. "Consumer loan growth is at a seven-year high, and low mortgage interest rates are fueling a buying spree. e Federal Reserve is once again threatening to move interest rates higher." Capozza said he expects the Fed will move cautiously in an election year, but added "Nevertheless, any increase in interest rates will raise the life-of-loan default risks for new originations." A number of factors affect the expected defaults on a constant-quality loan, UFA stated. Most important are worsening economic conditions. A recession causes an erosion of both borrower and collateral performance. "Borrowers are more likely to be subjected to a financial shock, such as unemployment, and if shocked, will be less able to withstand the shock. Fed easing of interest rates has the opposite effect," the report stated. Citi Provides Consumers More Relief, Monitor Says Independent monitor omas J. Perrelli has credited Citi with another $208.6 million in consumer relief toward its $2.5 billion obligation under the terms of a July 2014 settlement with the U.S. Department of Jus- tice and five states for selling toxic residential mortgage-backed securities to investors before the financial crisis. e amount credited to Citi in the most re- cent report brings the total of consumer relief provided by the bank up to $897.7 million. e bank has until 2018 to pay the $2.5 billion in consumer relief it agreed to in the settlement. e $208.6 million was provided in four different categories covering the third quarter of 2015 (July 1 through September 30, 2015). e relief was provided in 2,654 transactions across four categories: Rate reductions or re-financings, donations to community development organizations, donations to legal services organizations, and donations to HUD-approved counseling agencies. e majority of the transactions (2,561 of them) were in the rate reductions or refinance category. Prior to the report, Perrelli had credited Citi with $689.1 million in consumer relief covering 15,800 transactions. A Citi spokesperson declined to com- ment on the monitor's report. Citigroup settled with the DOJ and five states (California, New York, Illinois, Massa- chusetts, and Delaware) for a total of $7 billion in July 2014 amid claims that the bank misled investors as to the quality of mortgage-backed securities it sold. e portion of the penalty that went to the DOJ was $4 billion, which was the largest civil penalty to date under the Financial Institutions Reform, Recovery and Enforce- ment Act (FIRREA). e report released was Perrelli's fifth since the settlement was reached. GEORGIA Ocwen Utilizing HAMP More to Assist Borrowers Ocwen Financial Corporation has initi- ated over 14,000 trial modification plans to borrowers under the U.S. Department of the Treasury's streamlined modification program in six months since the program was launched in January 2016, according to an announcement from Ocwen. Over 4,100 of these trial plans granted to homeowners having difficulties with their mortgage payments were then converted to permanent modifications. ese trial plans were introduced under Treasury's Home Af- fordable Modification Program (HAMP), which was first launched in 2009 in response to the crisis and was broadened in January to include a "streamlined" modification process designed to more readily support borrowers meeting the HAMP eligibility criteria but not yet entering into the initial program. "e success of the HAMP program has proven to be a huge benefit to both homeown- ers and communities hard hit by the housing crisis. We are proud to be an integral part of that success, and we intend to dedicate the necessary resources to ensure that the program continues to accomplish its goals in the final year," stated Ron Faris, President and CEO of Ocwen. Ocwen has been a HAMP participant since the program's initiation in 2009 as well as an early adopter of the streamlined modifica- tion program. According to Treasury, through March 31, 2016, Ocwen has assisted homeowners in the ability to remain in their homes by modify- ing approximately 320,000 loans through HAMP. Modifications finalized by Ocwen stand as 20 percent of the total modifications completed by the mortgage servicers within the program. "Ocwen is excited about the additional families we have been able to reach through this new HAMP program. We will con- tinue to assist struggling homeowners prior to the sunset of the HAMP program," said Faris. "Ocwen is proud of its commitment and ability to help its customers remain in their homes, and this streamlined modifica- tion process allows more borrowers to obtain financial assistance through responsible loan modifications." Ocwen Amps Up Borrower Outreach Efforts Ocwen Financial Corporation and Oakland-based NID Housing Counseling Agency teamed up for a late-July event aimed squarely at low to moderate income and minor- ity communities in California. Ocwen home retention agents and certified NID housing counselors met with distressed

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