Senior Dem calls for probe into loan modification practices

“It has been noted in numerous studies that foreclosure is often the most profitable end result for a servicer that does not own the loan they are servicing. It goes without saying that this is an outright abuse of consumers and government mortgage assistance programs.”

The letters were sent to Christy Romero, special inspector general for the Troubled Asset Relief Program (SIGTARP), and to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve asking them to investigate how or whether the allegations against Bank of America interact with the Independent Foreclosure Review (IFR) settlement reached between regulators and mortgage servicers in January.

“Bank of America has received $992 million in incentive payments related to HAMP, making them the second largest beneficiary of such payments.” she wrote. 

“While that figure pales in comparison to the other TARP funds that the bank has benefited from, I do think it represents a significant amount of assistance from taxpayer.”

The OCC and the Fed reached a settlement with 14 servicers based on a review of their foreclosure practices from 2009 to 2010. The IFR, which was a detailed process designed to determine problems and compensate borrowers, ended with the agreement.

That agreement provided from $300 to $125,000 for each borrower based on the issues encountered.