The Treasury Department is taking disciplinary action against the residential servicing divisions of Wells Fargo & Co., Bank of America, and JPMorgan Chase for failing to comply with Home Affordable Modification Program (HAMP) guidelines.
The agency is expected to withhold HAMP incentive payments from the three – which control 54% of the residential receivables market -- until they correct the compliance problems.
The department will release new compliance assessments of the 10 largest HAMP servicers later in the day Thursday.
Treasury assistant secretary Timothy Massad recently told General Accountability Office auditors that he plans to take "remedial actions" to correct compliance problems.
"Treasury intends to begin withholding financial incentives for servicers not in compliance with program requirements," he said.
Treasury pays servicers $1,000 for every HAMP modification they complete and $500 for each year the borrower remains current on the modified loan.