US Watchdog Report: Treasury Not Doing Enough to Punish Poorly-Performing Mortgage Firms
July 28, 2011
In a quarterly report, an independent federal watchdog challenged whether the
Obama administration has done enough to punish mortgage firms for poor
performance in its Home Affordable Modification Program (HAMP). The Special
Inspector General for the Troubled Asset Relief Program said it supported the
Treasury Department's decision to punish mortgage companies for poor performance
under the initiative, but questioned whether enough companies had been punished.
The office has long been critical of how the administration has run the program,
which fell short of initial expectations. In June, the Treasury decided to
withhold millions of dollar in fees from Bank of America, Wells Fargo, and
JPMorgan Chase. However, the inspector general's report pointed out that other
companies had also fared poorly with HAMP. The program was announced in 2009
with a goal of assisting 3 million to 4 million homeowners in saving their homes
and obtaining permanent loan modifications. However, as of May 2011, it has only
helped 633,500 borrowers.
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