May 27, 2018

Lenders Urged to Improve Foreclosure Efforts

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Lenders Urged to Improve Foreclosure Efforts

The Obama administration urged banks to improve their service of the government’s anti-foreclosure efforts through the Making Home Affordable Program and to use federal funds more effectively in helping to save struggling home owners 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 home owners 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 home owners, home owner 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 home owners 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 home owners had received permanent loan modifications through HAMP. That's only about half of the number of home owners President Obama had first predicted would be helped by the program. When the program started in 2009, President Obama had predicted 3 million to 4 million would receive aid through HAMP. 

Source: “U.S. Treasury prods mortgage servicers to perform better,” Reuters (Dec. 9, 2013)

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