Bill Erbey, a prominent investor and the former chair and CEO of Ocwen Financial Corporation, received glowing endorsement from the National Association of Neighborhoods (NAN) for his role in helping American homeowners navigate their way through the negative risks of debt during the 2008/09 mortgage crisis.
According to NAN’s chief executive Ricardo C. Byrd, who penned a testimonial letter back in 2016, Erbey pioneered a bold new approach to supporting families who found themselves crushed under a mountain of mortgage debt—many of whom were faced with the imminent risk of default. To accomplish this, Erbey took to helping homeowners restructure their mortgages by facilitating favorable changes to the original loan agreements.
In particular, Byrd added that Erbey’s approach had proven itself to be particularly successful in helping the most vulnerable members of society, such as minority communities and lower-income families, many of whom felt the pinch of the housing crisis more than did other groups at the time.
“I am delighted to have this opportunity to recognize Bill Erbey for his significant contributions toward alleviating the adverse effects of the mortgage crisis on families and neighborhoods,” wrote Byrd in his letter, pointing out that “hardest hit minority and low income communities” in particular found relief as a result of Erbey’s efforts.
In order to achieve such a feat—especially during a time which saw many lenders and borrowers found themselves forced into a corner—Erbey, along with his team at Ocwen, decided to cast their net wide. They collaborated closely with housing counseling and other non-profit groups, taking their advice to heart when making a decision on how mortgages could be made both affordable and secure for American families struggling underneath the looming risk of foreclosure.
“Bill challenged the mortgage credo, ‘That you always pay what you owe’,” explained Byrd. “Fighting with some greedy mortgage investors, Bill insisted that in difficult times, they too must take a ‘financial haircut’.”
More specifically, the tactic for which Erbey opted was known as the Shared Appreciation Modification Program (SAM). A bold new approach, SAM was designed to assist homeowners who had fallen “underwater” as a result of their debt obligations, meaning that they owed more on their mortgage than they did on the actual value of the homes.
This, in effect, helped to ease the imminent threat that faced many families during the mortgage crisis, posed by the risk of defaulting on principal reduction programs.
By making favorable changes to existing loan terms, SAM was successfully able to ensure that families would not lose their homes as a result of foreclosure, and that any future appreciation in the value of the property would then be shared with the owner of the loan.
Ultimately, Erbey’s approach ended up being highly successful in this way, because it “paved the way for the various home preservation programs later implemented by government and the mortgage industry, enabling millions of Americans to keep their homes,” said Byrd.
“Bill’s creativity in mortgage servicing had one core value – it is always better to keep families in their homes and off the streets,” Byrd added.
NAN’s endorsement serves to highlight Erbey’s creative thinking and pioneering approach to solving problems. While Erbey started out his career in the mortgage industry, heading up General Electric Mortgage Insurance Corporation as the president and COO from 1983, his pursuit of opportunity has since expanded to other sectors.
An avid angel investor, Erbey seeks out new opportunities around every corner—a fact evidenced by his data-driven approach to using software to try to solve connectivity issues. According to online news website Techolac, Erbey is, in this way, always on the lookout for ways to “end internet congestion”.
For example, Erbey has a stake in System 73, a technology startup that provides multiple Content Delivery Networks (CDNs). The company, which has now expanded internationally, went on to develop Kuno Stream, an AI-driven system designed to enhance video streaming quality and capacity.
