Feds To Stop Punishing Chase, Bank of America For Sucking At Mortgage Modifications

Since the Treasury Dept. began releasing quarterly report cards on big banks’ efforts to improve their mortgage modification processes, Bank of America and JPMorgan Chase have consistently received subpar marks, leading the feds to withhold a total of $171 million in incentives. That money is now set to be released to BofA and Chase — but not necessarily because they suck any less at mortgage mods.

While the latest report card does say that both Chase and BofA have improved and thus will not be penalized going forward, the release of these previously withheld incentives is actually a result of February’s $25 billion settlement between the nation’s biggest lenders and 49 states.

Of the total amount, BofA will get $81.8 million and Chase will be gifted with $89.1 million. And because of the improved marks on this latest report card, both banks will continue to receive incentives so long as they don’t backslide.

Here is how things stand with the banks’ most recent results:

Bank of America was found to have remedied substantially all specific areas needing improvement that were identified in the prior assessments and continued to demonstrate improved processes generally. JPMorgan Chase demonstrated marked progress in remedying a number of outstanding issues from previous quarters. This includes improving the speed at which they process eligible homeowners for permanent HAMP modifications and strengthening their internal quality assurance processes around the program.

Chase’s situation had been so bad after the last report card that the Treasury recently threatened the bank with a permanent ban on incentives.

Obama Administration Releases February Housing Scorecard [Treasury.gov via Chicago Tribune]

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