The SAM Option

By E. Jason Billick

In 2010, Florida-based Ocwen Financial Corporation created the Shared Appreciation Modification, hereinafter (“SAM”). The SAM program was designed to get borrowers back on track with their mortgage payments through reducing delinquent principal owed. In exchange, the program provided an incentive to the owner of the loan (usually a bank) to share in some of the appreciation if the home increased in value by the time the borrower either sold or refinanced.

In practice, the SAM would forgive the balance of the mortgage up to 95 percent of the prevailing market value. The homeowner would then be required to share 25% of the home’s appreciation, if any. Principal reduction is one important advantage SAM has over the Home Affordable Modification Program.

The SAM program continues today and provides distressed home owners with an option for getting back on track.