Rep. Maxine Waters (CA) applauds the Treasury Department’s enforcement of Home Affordable Modification Program (HAMP) requirements on mortgage servicers:
June 13, 2011 – (RealEstateRama) — “More than two years after the Home Affordable Modification Program (HAMP) was launched, I am pleased that the Administration has finally decided to take enforcement seriously and penalize three servicers who have, as a matter of standard practice, foreclosed on millions of homeowners, often without properly screening them for modifications or otherwise following program rules.
On March 28, I sent a letter, along with a total of 50 House Democrats, demanding that the Treasury Department begin fining servicers who fail to abide by HAMP requirements. I am pleased that the Treasury Department took our call for enforcement seriously, and worked quickly to implement a new payment-withholding regime. We sent this letter because it was clear that a lack of consequences for misbehavior has encouraged servicers to cut-corners and even wrongfully foreclose on homeowners. Through Congressional hearings and conversations with my constituents, it became clear that lost paperwork, conflicting and confusing guidance from servicer staff, forged documents, and even unsubstantiated loan modification denials were the norm in the industry. Nicely asking mortgage servicers to follow the rules hasn’t worked; I agree with the Treasury Department that it’s time to start withholding funds.
Finally, I want to make clear that I consider this to be just a first step in straightening out the servicing industry. I hope that the Treasury Department continues to withhold payments for badly performing servicers, and I will continue to push our banking regulators to use their examination and enforcement powers to clean-up industry practices. Moreover, I continue to believe that state attorneys general should pursue a strong settlement with servicers, and demand not only steep fines, but drastic changes in servicer behavior.”