Pasadena, Calif.-based OneWest Bank FSB has implemented the Principal Reduction Alternative (PRA) loan modification program as outlined under the Home Affordable Modification Program (HAMP). With this announcement, OneWest becomes one of the first servicers to launch the program.
‘We are pleased to now offer principal reduction as yet another solution to help more borrowers stay in their homes,’ says Steven Mnuchin, OneWest Bank's chairman. ‘OneWest continues to be extremely supportive of both the [Federal Deposit Insurance Corp.'s] and the Treasury's leadership in the loan modification arena and appreciates the opportunity to be an early adopter of this important program.’
During the initial launch of the PRA program, OneWest Bank will consider eligible loans that are 60+ days delinquent and owned by OneWest Bank or serviced as part of an investor pool that has given OneWest the authority to implement HAMP. Qualifying loans must have a loan-to-value ratio in excess of 115%, and the home must be owner-occupied.
Under the program, principal will be forgiven over a three-year period in three equal installments. The amount of the reduction will initially be treated as a principal forbearance and will be non-interest-bearing.
SOURCE: OneWest Bank FSB