Bank Of America & Chase Continue To Be Penalized For Sucking At Loan Modifications

For the third quarter in a row, the Treasury Dept. has released its report card detailing how the country’s largest mortgage servicers are doing with processing loan modifications. And for the third consecutive quarter, both Bank of America and JPMorgan Chase will not receive incentive payments from the Treasury because the banks are doing such a craptastic job at complying.

Chase, the only of the servicers on the report card deemed to be in need of “substantial improvement.” If, by the end of the next quarter, Chase hasn’t resolved its issues, the Treasury folks will permanently reduce the amount of incentives the bank can receive.

From the Chicago Tribune:

According to the assessment, as of September, 72 percent of Chase’s trial loan modifications were converted to permanent modifications, compared to 90 percent for the best servicers. It also logged an average of 39 days to resolve escalated cases, compared with nine days for the best performing servicers. Chase also did not meet the government’s benchmarks for the processes it is using to identify and contact homeowners and how it is calculating borrowers’ incomes.

“We are disappointed with our rating, and will continue to work hard to improve our processes and controls,” says a Chase rep. That’s a slight improvement over the bank’s response to the June report card, with which it “respectfully disagreed.”

Meanwhile, Bank of America, was found to be in need of “moderate improvement,” and will thus continue to have its incentives withheld.

“Although Bank of America has not yet remediated all of the areas previously identified as requiring substantial improvement from the previous quarter, it has made progress in addressing a number of items,” writes the Treasury.

Chase, Bank of America slapped by Treasury Dept. [Chicago Tribune]

Obama Administration Releases November Housing Scorecard [Treasury.gov]