SIGTARP QUARTERLY REPORT TO CONGRESS I JANUARY 27, 2016

SIGTARP’s concerns over servicer misconduct contributing to homeowner redefaults in HAMP have been borne out. Treasury’s findings in its on-site visits to the largest seven mortgage servicers in HAMP over the most recent four quarters show disturbing and what should be unacceptable results, as 6 of 7 of the mortgage servicers had wrongfully terminated homeowners who were in “good standing” out of HAMP.

These staggering findings clearly show that servicer misconduct is contributing to some homeowners falling out of HAMP. Homeowners were wrongly terminated from HAMP by their servicer despite making timely mortgage payments, putting them at risk of losing their home. These homeowners were forced out of HAMP through no fault of their own. Mortgage servicers did not give these homeowners a fair shot. As these instances were found through sampling, Treasury does not know how many other homeowners were also wrongfully forced out of HAMP.

In the last year, Treasury found in its on-site compliance testing that 6 of the 7
largest HAMP servicers wrongfully terminated homeowners out of HAMP. At each
large servicer, each quarter Treasury selected samples of 100 homeowners who had
been in HAMP but redefaulted, and reviewed the servicers’ loan files. According to Treasury, within those sampled files, Treasury identified homeowners who had not defaulted in HAMP but who were nevertheless improperly terminated by their
servicer.

According to Treasury’s compliance reports provided to SIGTARP, the wrongful
terminations often involved homeowners who in fact had conformed to HAMP
rules. Homeowners who make their modified mortgage payments on time, or
who do not fall three months behind on those payments, are entitled to remain in
HAMP.

Treasury’s test results reveal that, within the last year (2015), Bank of America,
CitiMortgage, JP Morgan Chase, Nationstar, Ocwen and Wells Fargo all claimed
that homeowners had redefaulted out of HAMP by missing three payments when,
in reality, they had not. These six mortgage servicers account for 673,039 of the
915,699 (74%) non-GSE HAMP modifications funded solely by TARP since the
start of the program.

There has been no solution to this problem from Treasury despite Treasury identifying it repeatedly in its quarterly assessments throughout the year. Treasury found in its sampling that Nationstar, Ocwen, and Wells Fargo improperly
terminated multiple homeowners in multiple quarters. Even in the most recent
third quarter 2015 assessment, Treasury found improper terminations of
homeowners by 4 of the top 7 HAMP servicers—Bank of America, CitiMortgage,
JPMorgan Chase, and Wells Fargo.

There you have it. A report to Congress in 2016. What has been done about it? Nothing.

CLICK FOR FULL REPORT HERE.

What are you going to do about it? Get involved – an election year is coming up!