Mortgage servicers failing borrowers and Treasury

by Alan White

Mortgage servicers, including the big four banks, continue to perform poorly on their contracts with the US Treasury to modify loans and prevent foreclosure losses, much of the latter falling ultimately on taxpayers.  A new survey by ProPublica provides further empirical evidence of the systematic breach of servicer participation agreements.  For example respondents have been waiting an average of 14 months for a modification decision.  Documents had to be submitted an average of six times before a servicer would acknowledge receiving them.  It's time for Treasury to act.