Across the Nation Two Million Loans were Foreclosed Upon
Photo by Kenteegardin
GMAC is the only entity out of ten large ones that has agreed to submit its audit report to ProPublica because the firm “believes in honoring the spirit of the Freedom of Information Act Process”. Its spokesperson, Gina Proia, added that it had “elected to be transparent on our work with the (modification) program”.
Although the mortgage division continues with the name of GMAC, its parent firm has changed its name to Ally Financial. The government is the major stake holder in Ally Financial since it rescued the entity with funds from TARP. But Ally Financial and the Treasury both said that it had nothing to do with the decision of the company to permit release of documents.
Nine mortgage servicers objected to the release of the audit report, however. ProPublica had contacted them all. They either flatly refused to give any excuse for their action or parried by saying that the contents were of a confidential nature.
Collectively, these firms have till now been given $471 million (‘servicer incentive payments’) through HAMP. They are due to be paid millions more. The largest four banks of America are also the mega servicers of mortgage loans – Citigroup, Wells Fargo, JPMorgan Chase and Bank of America.
The Treasury spokeswomen responding in writing said that part of the report had been withheld because it would hamper “frank communications between mortgage servicers and compliance examiners” and, thus, harm the effectiveness of the program. The Treasury refused to give any kind of related document involved with the vital audit report.
Since the start of HAMP, housing advocates have been asking about the watchdog of this program and why it was not making its presence felt. The watchdog, Freddie Mac, was sounded in 2009 by the Treasury. It now has a staff of 121 employees and. through the contract , employs another set of 150 personnel. It is expected to regularly conduct audit all of the servicers participating in the program in order to ensure that they are complying with the rules.
Ultimately, the Treasury is responsible for taking the decision about penalizing these entities or not based on the audit findings.
In August 2009, the Treasury rejected the first reviews of Freddie Mac as being inadequate due to it being “inconsistent and incomplete”. Its staff were accused of being “unqualified” as per by the special inspector general of TARP. Freddie Mac gave the assurance that it would improve. Several more months dragged on.
Thus the vital first eight months HAMP operated without any watchdog while, across the nation, two million loans were foreclosed upon.
