Lenders prep for refinancing madness

Reporting from Washington -- President Obama, meeting with homeowners at the White House, said the government’s efforts to drive down interest rates had fueled a surge in refinancing -- putting money into many homeowners’ pockets during the current economic crisis.But almost all the refinancing so far involves borrowers with conventional mortgages who are not in serious financial trouble. The president’s own programs for helping troubled homeowners are just beginning to get off the ground.... Mortgage refinancing applications are up 15% since the beginning of the year, according to a weekly survey by the Mortgage Bankers Assn. Obama noted that the same survey shows an even bigger jump in refinancing applications -- 88% -- since the week he announced his mortgage relief plan in mid-February.

On Tuesday, Paul Koches, general counsel at servicing firm Ocwen Financial Corp., said the West Palm Beach, Fla., company last year hired psychologist Seth Carter to help the company screen for employees to work with borrowers to counter a shortage of industry experts. ‘You’ve got a situation in the industry where all of the trained, experienced collectors -- the resolution consultants -- anybody who’s out there with training, they’re hired. They’re sopped up,’ Mr. Koches said. ‘There is an unprecedented demand. So we’ve got to go out there and find people who don’t have that training background.’

Instead of telling a borrower that Ocwen has empathy because the borrower is one of thousands in financial peril, Ocwen tells the borrower that he could be one of many whose homes have been saved. ‘That’s a much more positive spin,’ Mr. Koches said.