Oct 04, 2011
Despite major errors on mortgage mods, gov’t shrugs
04 Oct 2011
Posted by Andrew Kantor
HAMP — the federal government’s Home Affordable Modification Program — which is in charge of overseeing mortgage lenders’ efforts to offer refinancing options, has essentially shrugged its shoulders when it found large-scale issues during at least one bank audit.
Government audit reports obtained by ProPublica show that there was little oversight given to GMAC (the country’s fifth largest mortgage servicer) during the first eight months it was offering loan modifications.
When auditors did finally conduct a major review more than a year into the program, they found that GMAC had seriously mishandled many loan modifications – miscalculating homeowner income in more than 80 percent of audited cases, for example. Yet GMAC suffered no penalty. GMAC itself said it hasn’t reversed a single foreclosure as a result of a government audit.
Although the government has only released details about GMAC, it does release general information about the program every quarter. In June, ProPublica found,
The public report showed what Treasury called “substantial” problems at four of the ten largest servicers — Bank of America, JPMorgan Chase, Wells Fargo, and Ocwen — and Treasury for the first time withheld taxpayer subsidies from three of them.