Finding SAM (Shared Appreciation Modification)
In our November 14th, 2017 commentary, we discovered that Ocwen’s Shared Appreciation Modifications (SAM), as promised by CEO Ron Faris, are delivering additional returns to investors now that the housing market has rebounded. We found a field in Ocwen REALPortal that contains investors’ 25% share of the equity appreciation, which matches close to the recovery passed through to investors at payoff. Unfortunately, there is no field available that flags which modified loans are part of the SAM program, so we could not determine how much potential shared appreciation is available. The governing documents never imagined that investors would need this information. However, this is important, as it is cash that one day may be recovered by investors. From Ocwen’s 2016 10-K, we know over 55,000 modifications under the SAM program had been completed. By digging into the data, joining together multiple data sources, building in logic and a little luck, we found a path that led us to what we believe are 21,862 SAM loans with $333 million in potential recovery for RMBS investors.
The journey we took to find SAM:
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