The Treasury Department is getting tougher on servicers who don't comply with guidelines of the Home Affordable Modification Program and soon will release compliance grades for the 10 largest HAMP servicers.
Although Treasury lacks the authority to impose financial penalties on servicers, it has taken remedial actions, requiring servicers to correct compliance problems.
In a recent letter to the General Accountability Office, Treasury assistant secretary Timothy Massad noted that the government “intends to begin withholding financial incentives for servicers not in compliance with program requirements.”
Massad sent the letter in response to a GAO audit of HAMP servicers. "As a continuation of our ongoing compliance operations, Treasury is developing and intends to release compliance assessments for each of the 10 largest [HAMP] participating servicers," Massad noted.
Treasury has agents in the largest servicing shops conducting compliance reviews on a monthly basis. The agency is expected to include its first compliance assessments in a monthly HAMP performance report slated for publication in early June.
GAO auditors conducted a survey of housing counselors who were highly critical of the performance of many top ranked servicers in regard to HAMP. When asked about improvements that could be made to the program, 60% of the counselors said Treasury should impose sanctions on servicers for failing to comply with HAMP guidelines.
GAO sent copies of the HAMP report to ranking members of House and Senate Appropriations, Banking, Budget and Tax committees.
