Loan modification plan offers solution for distressed homeowners

Lenders have long resisted cutting loan amounts for struggling homeowners, fearing it would entice more borrowers to default. But one locally based servicer, Ocwen Financial Corp., believes it has found a solution.

The company is rolling out a new loan modification plan for underwater borrowers that lowers the amount owed on the loan — thus reducing the monthly payment — but asks for a share in the appreciated value when the house is either sold or refinanced.

The kickback to the lender may deter people who can afford to make their payments from defaulting, while giving an incentive to either the lender or investor to modify the loan

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