Ocwen is a large mortgage servicer and has been known for being difficult to deal with when it comes to loan modifications and short sales so I was intrigued when I saw this story about Ocwen principal reductions.
It sounds like this program only works if you are currently underwater on your mortgage. You must remain current on your modified mortgage. They will reduce the principal amount so there is 5% equity. When you finally go to sell, they want 25% of the appreciation and you keep 75%. Not a bad deal. It will be interesting to see how many of these they do and IF people an uphold their end of the bargain by remaining current on their modified loan. That has been a huge problem with loan modifications. Too often people start falling behind again within 6 months of receiving the loan mod.