“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”
Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.
Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments. Read more at the NYT
Treasury has been shaming since August. The laggards in modifications and the standouts:
And among the laggards are two of the top three: Wells Fargo and Bank of America (the largest).
There are some standouts among the large servicers: JPMorgan Chase, GMAC, Aurora and Saxon. The gap between those top performers and the others is quite wide. JPMorgan Chase, for instance, has started nearly three times as many trial modifications under the program as Bank of America. But it services only about half as many eligible loans that are 60 days or more delinquent, a rough indicator that Treasury used to estimate the total eligible loan pool. ProPublica
