Distinctive features related to principal forgiveness in an unusual modification program Ocwen recently started could improve efforts made to resolve underwater loans in securitizations, according to a Moody's Investors Service report Monday.

Ocwen's program, which also has a novel shared appreciation component, is unusual in the hierarchy of the modification options in that it offers principal forgiveness first ahead of interest rate modifications and other adjustments, said Amita Shrivastava, vice president-senior credit officer at Moody's.

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