Feds To Stiff Three Major Servicers On Cash Handouts Over HAMP Rules Violations

Bloomberg reports:

• The U.S. Treasury Department will withhold financial incentives from three of the largest mortgage servicers after they failed to take required steps to prevent foreclosures under an Obama administration program.
• Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. were found to need “substantial improvement,” the Treasury said in a report [...]. The banks are being penalized for failing to meet rules set by the Home Affordable Modification Program, or HAMP, which pays servicers to lower monthly mortgage payments for distressed homeowners.
• “We don’t have the power to impose fines,” Tim Massad, acting Treasury Assistant Secretary for Financial Stability, told reporters. “We have the power to publicize what they’re doing. We have the power to withhold incentives. That’s what we’re doing.” [...] A fourth servicing company, Ocwen Loan Servicing LLC, also was cited for poor performance. The company won’t sacrifice its fees because it had acquired a large servicing portfolio during the testing period, the Treasury said.

For more, see BofA, JPMorgan Penalized by U.S. for Failing to Act on Home Foreclosures.