06.09.11

Whitehouse: Banks That Ignore Mortgage Modification Rules Should be Penalized

RI Senator Applauds Administration for Withholding Payments

Washington, DC – With too many Rhode Island families still struggling to keep their homes in the wake of the foreclosure crisis, U.S. Senator Sheldon Whitehouse (D-RI) today applauded the Obama Administration for cracking down on big banks who have failed to comply with the requirements of the Making Home Affordable (HAMP) program.  The Administration announced that Bank of America, J.P Morgan Chase Bank, and Wells Fargo Bank will not receive financial payments from the HAMP, which was established in 2009 to give banks incentives to re-negotiate mortgages and keep families in their homes.

“I’m pleased the Administration took action today against big banks that failed to cooperate with efforts to prevent foreclosures,” said Whitehouse.  “These banks legally committed to participating in the HAMP program and then flouted the rules.  They should not receive any payments from the program until they follow the rules and make every effort to keep families in their homes. ”

In releasing their May edition of the Obama Administration's Housing Scorecard, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today concluded that Bank of America, J.P Morgan Chase Bank, and Wells Fargo Bank need to “substantially improve” their compliance with the HAMP. 

In February, Whitehouse wrote to Treasury Secretary Geithner to express his concerns with foreclosure prevention efforts.  In that letter, Whitehouse stated, “Servicers not in compliance with HAMP guidelines should be held accountable through meaningful financial penalties.” 

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