Freddie Mac (FRE) said Tuesday that it is piloting a third-party servicing program for Alt-A and other at-risk nonperforming mortgages, called the Workout Strategy for High Risk Loans, that will see Freddie place certain loans with special servicers in an effort to implement more aggressive loss mitigation strategies. The move comes as some traditional mortgage servicers have run into problems quickly and completely implementing the recently-announced streamlined modification program, sources at various key banks have suggested to HousingWire. The streamlined modification program (SMP), announced on Nov. 11 of last year, is aimed at borrowers who have missed three payments or more, own and occupy their primary residence, and have not filed for bankruptcy. Critics have suggested the bulk modification effort will encourage borrowers to default on their mortgages, in order to obtain favorable interest rates and possible principal reduction on their mortgages. See earlier story. But implementing the bulk modification program has proven to be a more difficult task than most expected when the program was first announced, particularly among some of the larger servicing platforms, forcing both Freddie and sister GSE Fannie Mae (FNM) to extend previously-announced freezes to evictions through the end of February. “We’re talking about changing the nature of the loss mitigation process, and we’re asking already overtaxed and perhaps oversized servicers to change their process and staffing on a dime,” said one source, a banking executive who asked not to be named in this story. “It sure looks like Freddie is exploring the idea of moving the most at-risk assets to other shops set up specifically to handle that kind of work.” While Freddie Mac did not address any particular reason for rolling out the pilot servicing and loss mitigation program, and didn’t specify if the program involved moving loans from one servicing shop to another, senior vice president of default asset management Ingrid Beckles did hint that existing servicers may not have adapted as quickly to the new requirements as the GSE or its regulators had hoped. “A workout strategy is only as successful as the number of knowledgeable counselors available to answer the phone,” she said in a statement. “Our strategy for high risk loans is designed to help servicers cope with today’s unprecedented call volume by directing calls to a specialist with the specific staff and technical resources for handling a high volume of borrowers with these types of mortgages.” Under the new pilot, a selected portfolio of higher risk mortgages that are at least 60 days delinquent will be given to a specialty servicer for what the GSE characterized as “intensive attention,” including the use of the streamlined modification program. Ocwen Financial Corporation (OCN) is one of the servicers Freddie Mac has selected for the pilot, the GSE said; the subprime servicer has made headlines in recent months for comparatively heavy loan modification activity among the loans it services. Ocwen will deploy teams of specially trained counselors to handle Freddie Mac’s delinquent high risk mortgages in order to minimize telephone wait times, put borrowers in touch with live counselors faster, and implement the latest Freddie Mac foreclosure reduction policies more quickly, according to a press statement. “If that isn’t telling a mega-servicer to get their act in gear or risk seeing loans walk out the front door, what is?” said one servicing executive at a third-party servicing shop that is also participating in the Freddie Mac pilot program, under condition of anonymity. Initially, the pilot will target an estimated 5000 reduced documentation loans from California, Nevada and other states with high delinquent rates. Although Alt-A loans were made to borrowers with strong profiles and represent a fraction of Freddie Mac’s single family portfolio, they account for half of the GSEs’ seriously delinquent mortgages. Freddie Mac plans to determine whether to broaden or modify the strategy after reviewing the pilot’s June results, it said. Write to Paul Jackson at paul.jackson@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.