AgentMortgage

Using hard data, psychology to predict mortgage default

Tool gives distressed-asset managers insight into borrower behavior, risk

Paying your mortgage is all in your head. Well, really, it's all in your wallet or checkbook, but what's going around in your brain is whether you intend to pay that mortgage, and savvy loan servicers are trying to figure out what's up there swirling about the cranium. Take Ocwen Financial Corp., for example. It is now the largest servicer in the country of subprime mortgages, which are, of course, risky loans, and it behooves Ocwen to try to figure out a way to keep the borrowers -- many of whom are distressed -- paying their mortgages. Mortgage servicers collect loan payments on behalf of investors or lenders that own the loans, and when those loans appear to be troubled, mortgage servicers will either remedy or foreclose. Ocwen has for a long time employed a team of social psychologists who write the scripts used in the call centers. As writer Ruth Simon wrote about Ocwen in the Wall Street Journal last year: "Psychologists are parsing the words borrowers use for ...