Treasury to grade servicers on HAMP performance
In April, the Treasury Department will begin grading servicers on their performance in the Home Affordable Modification Program. Assistant Secretary Tim Massad made the announcement Tuesday when speaking before the John F. Kennedy School of Government at Harvard University. Later Tuesday, the House of Representatives is scheduled to vote on a bill that would terminate HAMP nearly two years before it is scheduled to at the end of 2012. Massad said the Treasury will begin releasing a quarterly compliance report, which will include a scorecard for each of the 10 largest HAMP servicers. It will measure how servicers evaluate homeowners for modifications, staff resources and internal processes these companies dedicate to the program. However, Massad and the Treasury maintains it does not have the authority to crackdown on those participating in HAMP, but he said it can keep funding from the servicers that do not make the grade. "Under the law, this is a voluntary program, based on a contract. We do not regulate the servicers, and we cannot fine them," Massad said. "To date we have required servicers to take remedial actions to fix inadequacies based on our contractual rights. We will continue to take those actions, and we will begin withholding financial incentives for servicers receiving an unsatisfactory grade." Through February, servicers started roughly 600,000 permanent modifications through HAMP, which was launched in March 2009. Originally estimated to reach between 3 million and 4 million borrowers, the program has been deemed a failure by some, underwhelming to most — yet touted by the Treasury as the foundation upon which all private modifications since have been based. But even HAMP's harshest critics, including New York Superintendent of Banks Richard Nieman does not support terminating a program that has consistently helped between 25,000 and 30,000 families per month. "Critics like myself have stated on numerous occasions that the Home Affordable Modification Program must continue to do better for American families," Nieman said. "Our position remains the same. But killing the program is a far worse solution than even maintaining the status quo." Write to Jon Prior. Follow him on Twitter @JonAPrior.