Dodd Seeks Loan Mod Investigation

Senate Banking Committee chairman Christopher Dodd, D-Conn., wants HUD and the Treasury Department to investigate allegations by a consumer attorney that servicers are demanding upfront payments for loan modifications and violating other provisions of the Obama administration's Home Affordable Modification Program. In a letter to Treasury secretary Timothy Geithner and HUD secretary Shaun Donovan, Sen. Dodd highlighted allegations made by National Consumer Law Center attorney Diane Thompson in testimony before the banking committee. Ms. Thompson testified that some servicers are requiring homeowners to waive all claims and defenses in order to apply for a modification review. Servicers also are denying reviews to borrowers who are not yet in default, she said. "If true and widespread, abuses of this kind threaten to undermine the effectiveness of the HAMP program and deny the relief on which so many Americans are depending for their financial stability," Sen. Dodd says in a July 23 letter.