Three banks spanked for subprime mortgage practices

[n2doc]

Posted on Jun 10, 2011


In a startling move, the Obama administration is holding three major banks—Wells Fargo, Bank of America and JPMorgan Chase—accountable for their bad lending habits on the mortgage market, cutting off funds from the Home Affordable Modification Program until they shape up.

While the other two megabanks are taking the hit, Wells Fargo plans to push back on the government’s decision, claiming that the evaluation was inaccurate and outdated. —KA

Los Angeles Times:

After a review of the 10 largest mortgage servicers in its program, the Treasury Department found that Bank of America, JPMorgan Chase and Wells Fargo needed substantial improvement in correctly evaluating borrowers’ incomes — a key component of determining eligibility for the program.

Bank of America, the nation’s largest mortgage servicer, appeared to fare the worst in the administration’s evaluation. The bank also needs to make substantial improvement in identifying and contacting borrowers for the program, clearly demonstrating how the bank reaches its loan-modification decisions and ensuring the bank was receiving the correct incentive payments through the program, the government said.

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http://www.truthdig.com/eartotheground/item/three_banks_spanked_for_subpar_mortgage_practices_20110610/

[lonestarnot]

1. hmm.

[dkf]

2. Is this simply bad PR or is it actually bad for the banks to not be able to use this program?

And if it's so beneficial why haven't they been doing it?

[dixiegrrrrl]

3. The program is good for the banks.

They get paid by us, the taxpayers ( sometimes called, by mistake, "the government") a few thousand dollars to
ENROLL people in mortgage modification.
They get the money whether the homeowner is accepted or not.
If the homeowner is accepted, the bank has to give them a better mortgage deal.
Lot of people were "enrolled" damn few got any mod.

[dkf]

4. Hmm that is dirty.

Well can't argue with the Govt enforcing their own programs. What took them so long is the more curious thing.