WASHINGTON (MarketWatch) — The Obama administration on Thursday halted payments to three of the largest U.S. banks until they make “substantial” improvements to their performance in a mortgage assistance program.
The big three can no longer receive fees from the program known as the Making Home Affordable Program, until they make changes to ensure their processes work better, the Treasury Department announced. The program seeks to help troubled borrowers avoid foreclosure.
The big banks have been broadly criticized for foreclosure documentation errors, and in many cases, institutions have assigned only a single employee to rapidly approve numerous foreclosures. The major banks were sanctioned in April by federal regulators for “negligence” in residential mortgage loan servicing and foreclosure processes. Hefty fines in the billions of dollars are likely still on the way from a related, ongoing investigation on the part of state attorneys general and the Justice Department.
The Treasury Department found that the three firms are in need of substantial improvements based on the agency’s compliance reviews and program performance results from the first quarter of 2011. They agency evaluated banks on how they contacted homeowners, evaluated whether homeowners need assistance and their management and governance.
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A few more afternoon links...
- Matt Taibbi Calls Sorkin a Sellout
- Lies, Damn Lies and Krugman
- ECB’s Trichet signals hike, vows no default
- German Court To Challenge Greek Bailout, Says Action Is Unconstitutional
- Euro end game draws nearer - Will Europe fly apart, or stick together?