Waters Calls for Investigation of Mortgage Servicers Who Benefitted by Misleading Borrowers Eligible for HAMP
Congresswoman Maxine Waters, Ranking Member of the House Financial Services Committee, sent a letter today to Christy L. Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), calling for an investigation of Bank of America or any other mortgage servicer, who allegedly benefitted by misleading borrowers eligible for the Home Affordable Modification Program (HAMP).
Ranking Member Waters' letter comes after an article in Bloomberg cited court documents in which former loan employees stated that, Bank of America, the second-biggest U.S. lender, "regularly drilled" employees, "to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means."
The letter notes that according to significant anecdotal evidence as well as a number of academic studies that "foreclosure is often the most profitable end result for a servicer that does not own the loan they are servicing."
"Bank of America has received $992 million in Incentive Payments related to HAMP, making them the second largest beneficiary of such payments." Ranking Member Waters writes. "While that figure pales in comparison to the other Troubled Asset Relief Program (TARP) funds that the bank has benefited from, I do think it represents a significant amount of assistance from taxpayer," the letter continues.
Ranking Member Waters also sent a letter to the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve (Fed) asking them to investigate how or whether these allegations against Bank of America interact with the Independent Foreclosure Review settlement reached between regulators and mortgage servicers in January 2013.