Mortgage Servicers To Explain Themselves To Administration Officials Regarding Failure To Keep People In Their Homes

In Washington, D.C., ABC News reports:

• Mortgage servicers accused of not doing nearly enough to stem the nation's foreclosure crisis will sit down with the Obama administration tomorrow to tell their side of the story.(1) The meeting, the results of which are not expected to be made public until early next month, comes amid escalating criticism that both mortgage servicers and the government are ill-equipped to carry out Obama administration programs designed to help keep people in their homes. [...] The National Consumer Law Center, which presented testimony to the Senate earlier this month, has identified dozens of ways in which some mortgage servicers have failed to follow guidelines set by the Home Affordable Modification Program (HAMP), a five-month-old Obama administration program that pays servicers at least $1,000 for each loan modification.

Reportedly, Sen. Chris Dodd, D-Conn., has asked the administration to investigate alleged abuses of the program by mortgage servicers, which include:

• Charging advance fees for loan modifications,
• Telling homeowners they must be in default before becoming eligible for loan modifications,
• Starting foreclosure proceedings even while a homeowner is under consideration for a loan modification.

For more, see Mortgage Companies to Meet With White House (Meeting Comes Amid Mounting Criticism of Obama Housing Programs).

(1) The mortgage servicers are responding to this recently extended invitation from Treasury Secretary Timothy F. Geithner and HUD Secretary Shaun Donovan to get together for a "friendly chat."