HAMP: Obama Administration Lets Banks Out Of Doghouse For Bad Mortgage Servicing
WASHINGTON — The Obama administration announced Friday that as part of a recent $25 billion settlement with big banks, the government will release money withheld from Bank of America and JPMorgan Chase for doing a bad job modifying mortgages under the administration’s signature anti-foreclosure scheme.
Banks participating in the Home Affordable Modification Program receive incentive payments for lowering eligible borrowers’ payments in order to prevent foreclosure. The program has fallen far short of expectations, and more borrowers have had their modifications canceled than remain in the program.
The Treasury Department, which oversees the program, started withholding incentive payments from several banks last June. On Friday, the department said $81.7 million will be released to Bank of America and $89.1 million will be handed over to Chase.
The administration is letting the banks out of the doghouse not because of vastly improved servicing, but rather as a result of the $25 billion foreclosure fraud settlement struck last month. “As part of the mortgage servicing settlement, Treasury has agreed to release withheld incentives for past deficiencies,” Treasury said in a release.
Hey, but you might get $2,000 in return for your stolen home…
Feel better now?