WASHINGTON – Dec. 12, 2013 – The Obama administration urged banks to improve their service of the government’s anti-foreclosure efforts through the Making Home Affordable Program (HAMP) and use federal funds more effectively in helping to save struggling homeowners from foreclosure.
The U.S. Treasury singled out CitiMortgage Inc., telling the bank it needed to make “substantial improvement” in its loan modification efforts through the Home Affordable Modification Program and to reach out to more homeowners who are eligible to receive assistance.
The Treasury provides financial incentives to mortgage servicers under HAMP, which aims to encourage servicers to change the terms of struggling borrowers’ mortgages and lower their monthly payments. The Treasury routinely evaluates servicers’ actions on implementing the program, identifying and contacting homeowners, homeowner evaluation and assistance, and program management and reporting.
“There is still room for improvement for servicers, and the Treasury is committed to applying pressure on the mortgage servicing industry to improve servicer behavior,” says Tim Bowler, Treasury deputy assistant secretary.
The Treasury’s report also singled out Ocwen Loan Servicing LLC, Selecting Portfolio Servicing Inc., and Wells Fargo & Co. for needing “moderate improvement” in servicing struggling homeowners through HAMP. Bank of America and JPMorgan Chase & Co. need to make only “minor improvement,” the Treasury noted.
By the end of October, 1.5 million homeowners had received permanent loan modifications through HAMP. That’s only about half the number of homeowners that President Obama initially predicted – 3 million to 4 million – the program would help when it program started in 2009.
Source: “U.S. Treasury prods mortgage servicers to perform better,” Reuters (Dec. 9, 2013)
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