B&C Borrowers Find It Hard To Catch Up with Late Bills.(Brief Article)

When servicing lower credit-rated home loan customers, lenders need to remember that these are people who haven't saved a lot to get them through a rainy day.

"By the time they have stopped paying their mortgage, you are competing with a lot of other creditors," said Scott Conradson, a senior vice president at Ocwen Federal Bank who spoke at the recent MBA Mortgage Servicing Conference.

Subprime borrowers are more likely to get behind on their monthly payments and are more likely to have trouble catching up when they are behind, he said.

They are also less likely than conventional borrowers to return calls from a collection counselor, making it more difficult for servicers to work with them to resolve problems.

In addition, subprime borrowers are more likely to skip tax and insurance bills than conventional borrowers, so lenders need to be prepared to make force payment. In Ocwen's case, only about a quarter of its loan servicing portfolio ...