It’s clear to most of us that mortgage loan modification, once touted as the answer to the foreclosure crisis and crumbling real estate market, just isn’t working out. The tide of foreclosures continues, fraud abounds and homeowners are no better off.
After a year of requests, Pro Publica has obtained documents that seem to explain exactly why HAMP isn’t working: no one over there is taking much of any action.
Documents obtained by ProPublica—government audit reports of GMAC, the country’s fifth-largest mortgage servicer—provide the first detailed look at the program’s oversight. They show that the company operated with almost no oversight for the program’s first eight months. When auditors did finally conduct a major review more than a year into the program, they found that GMAC had seriously mishandled many loan modifications—miscalculating homeowner income in more than 80 percent of audited cases, for example. Yet, GMAC suffered no penalty. GMAC itself said it hasn’t reversed a single foreclosure as a result of a government audit.
Naturally, the Treasury Department denies any problems with the program; in fact, a spokesperson called it “effective and unprecedented in many ways.” But the GMAC records provided this first glimpse into the glaring oversights, errors and lapses of the program only because the company agreed to the release of those records. We’ve yet to see what’s happening with the four largest servicers in the country, and there’s little reason to believe the news will be any better.
Read the full story at Pro Publica