HAMP: Chase, Bank of America ‘Improve’ Mortgage Mod Practices

Treasury and Housing officials say the biggest mortgage servicers in the administration’s foreclosure-prevention campaign, Home Affordable Modification Program (HAMP), showed “considerable” improvement in helping homeowners reduce monthly payments in the fourth quarter of 2011.
JPMorgan Chase and Bank of America had been cited for performance issues in the third quarter of 2011. Chase had been found to need “substantial improvement,” while BofA was in need of “moderate” improvement.
In HAMP’s just-released fourth quarter assessment, both servicers were found to have “improved their practices,” said a statement from Treasury and HUD (Housing and Urban Development) officials, the administrators of the program.
Both Chase and Bank of America have started receiving HAMP cash incentives for correcting deficiencies in three areas: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance.
The incentives had been suspended pending improvements in servicer performance.
“As part of the mortgage servicing settlement, Treasury has agreed to release withheld incentives for past deficiencies,” said the Treasury/HUD statement. “However, Treasury will continue compliance reviews and retains the right to withhold incentives in the future.”
HAMP officials say the standards established in the program “were also a guide for many of the servicing standards included” in the $25 billion settlement recently announced between the federal government, 49 state Attorneys General and the five largest mortgage servicers – including Chase and BofA –  regarding mortgage foreclosure processing deficiencies.
Meanwhile, HAMP continues to add permanent mortgage modifications to reduce monthly payments for homeowners facing possible foreclosure, but the program remains plagued by cancellations and a failure to reach the intended 3 million to 4 million delinquent mortgage borrowers.
HAMP has started 951,319 permanent mortgage modifications, but about 768,773 remain active through the end of 2011, according to the latest figures released by the administration. More than 946,000 attempts at reducing monthly payments have been cancelled through December.
HAMP targeted up to 4 million homeowners when launched in 2009, but it lists a pool of about 884,910 eligible delinquent borrowers as of the end of December 2011.
Beginning in May, homeowners will be evaluated under the latest enhancements to the HAMP, which has been extended by another year – now ending on Dec. 31, 2013.
HAMP is expanding eligibility to include borrowers whose debt-to-income ratio is below 31 percent, properties occupied by a tenant and vacant properties that the borrower intends to rent.

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