Two More Servicers Sign up for Treasury's HAMP
The US Treasury Department added two mortgage servicers to its Home Affordable Modification Program (HAMP) since its early-July additions, bringing the total number of participating servicers to 27. Lake National Bank and IBM Southeast Employees' Federal Credit Union both signed on July 10 to participate in the program, receiving up to $100,000 and $870,000 apiece in initial incentive payment caps. Through HAMP, servicers receive and distribute incentive payments to borrowers and lenders/investors for modifications initiated and successfully maintained. The Treasury is making a series of moves to increase servicer capacity for the program, including a letter issued last week to the (then 25) top US servicers participating in HAMP, urging them to step up modification efforts. “We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share,” the letter reads. The new participants in the program arrive after a mid-June cap adjustment on the Treasury’s TARP fund investments to several major servicers based on actual participation in the modification program. The Treasury reduced the total amount that CitiMortgage can receive and distribute to borrowers for modifications by more than $991m to a total $1.08bn, as a reflection of actual funds usage. Wells Fargo’s total incentive payment amount received more than $462m in reductions to a revised cap of $2.41bn. Write to Diana Golobay.