Current Issue
Senate Banking Committee Chairman Chris Dodd (D-CT) asked regulators to investigate accusations that several mortgage servicers participating in the Home Affordable Modification Program (HAMP) violated program guidelines.
At a hearing chaired by Dodd last week, Diane Thompson of the National Consumer Law Center testified that several participating servicers demanded upfront payments in advance of review or trial modification, denied aid to homeowners not in default, required borrowers to waive all claims and defenses before a review and foreclosed on homes still pending review by HAMP.
In a letter Dodd sent to Treasury Department secretary Timothy Geithner, Dodd asked for an investigation of the alleged violations.
“If true and widespread, abuses of this kind threaten to undermine the effectiveness of the HAMP program and deny the relief on which so many Americans are depending for their financial stability,” the letter reads.
Dodd also noted that the problems undermine the important transparency in the program guidelines and their implementation, and that the federal government funds a significant amount of foreclosure prevention counselors.
“If the rules and procedures governing the program are made public, these counselors and other interested parties can help ensure that Treasury guidelines are followed and mistakes prevented or expeditiously corrected,” the letter reads. “Transparency can help ensure accurate and timely results, and I urge you to require openness in the operation of this important program.”
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