April 6, 2011 (Chris Moore)
Acting Assistant Secretary of the Treasury, Timothy Massad, revealed in a speech given at Harvard University’s John F. Kennedy School of Government, that starting in April the Treasury Department will include a scorecard for each of the largest HAMP servicers in its quarterly compliance report.
Massad said in his speech, that since the inception of the Home Affordable Modification Program (HAMP), the Treasury began publishing a monthly mortgage servicer performance report of servicer specific information on loan modifications and the homeowner experience. In 2010, they expanded the report to include results of compliance reviews, metrics on homeowner experience, performance of HAMP, modifications over time, survey data on homeowners who did not receive permanent modifications, and, most recently, a data file with loan level details on homeowners.
The new scorecard will highlight servicer compliance on a number of key performance metrics, including proper evaluation of homeowners for modifications, staff resources and internal processes dedicated to program implementation and quality control.
Mortgage service companies will now also be rated against their peers.
The assistant secretary also added HAMP was a voluntary program, based on contract, and that they could not regulate servicers, nor fine them. He noted that they have required servicers to take remedial actions to fix inadequacies in their programs based on their contractual rights.
Commenting on the recent vote by the House of Representatives to terminate HAMP, Massad said, “The housing crisis took years to create, and there is no easy or quick way to repair all the damage that it caused. It is going to take hard work, sustained effort, and bipartisan cooperation. Terminating HAMP is certainly not the answer. It would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners, creating unnecessary hurdles for those seeking relief. More broadly, it would remove a critical path to recovery for tens of thousands of American families and for our overall economy.”
Ironically, during the speech, Massad made the argument that HAMP only assists homeowners who show that they can meet their obligations under the modified loan, yet according to a report released by the Office of Thrift Supervision, since January 2008, 47 percent of all borrowers who have had their loans modified and had their payments reduced by 10 percent or greater, were delinquent on their new loans.
Tags: Treasury department, Timothy Massad, HAMP, mortgage servicers, loan modifications, scorecard, servicer compliance, permanent modifications, American families