Geithner Vows Crackdown on US Mortgage Servicers
US Treasury Secretary Timothy Geithner on Thursday slammed mortgage service companies for failing to do enough to help Americans avoid losing their homes and promised to crack down on shoddy practices.
"We do not believe servicers are doing enough to help homeowners —not doing enough to help them navigate the difficult and frightening process of avoiding foreclosure," Geithner said in prepared remarks for delivery to a Senate appropriations subcommittee.
He said Treasury was "troubled" by reports that servicers had done things like foreclose on homeowners who were potentially eligible for relief under the government's Home Affordable Mortgage Program, lost documents or claimed to have done so and even steered troubled homeowners away from available assistance.
"None of this is acceptable," Geithner said, adding that Treasury was doing "targeted, in-depth compliance reviews" to make sure that servicers were acting in good faith.
"In circumstances where servicers are not compliant we will withhold incentives or demand their repayment," he said, referring to fees that servicers earn through the HAMP program by helping homeowners adjust their loan payments so that they can avoid foreclosure.
Geithner said Treasury soon will publish "much more detailed data on the performance of servicers" so that lawmakers and ordinary citizens can gauge for themselves whether the service companies are acting in good faith.
