Treasury Response to ProPublica Questions about HAMP Audits

Check out question number 11:

11) In early June of this year, Treasury announced that it would be withholding servicer
incentives for four servicers. It recently announced that it would continue to withhold incentives for two servicers, namely Bank of America and Chase. However, according to the transaction reports posted on financialstability.gov, Treasury has continued to pay incentives to these two servicers. Since the end of May, Bank of America subsidiaries have received $2.5 million in servicer incentives. During that same time, Chase subsidiaries have received $404,000. Please explain.

To clarify, in June 2011 Treasury reported it would withhold servicer incentives from three servicers: Bank of America, JPMorgan Chase, and Wells Fargo. The Wells Fargo incentives were subsequently released in September 2011. Servicer incentives for HAMP and HAFA were withheld. Regrettably, current system limitations currently prevent the systematic withholding of incentives on the second lien program, 2MP, without also withholding the investor incentives for 2MP. We are currently working with our program administrator to modify our systems to withhold just the 2MP servicer incentives in the future. Due to the relatively de minimus amounts of the 2MP servicer incentives in relation to the HAMP and HAFA servicer incentives, we made the decision to continue to pay all 2MP incentives for the time being, rather than stop paying all 2MP incentives (including the investor incentives) and possibly risk investors stopping 2MP modifications, which would have an adverse impact on homeowners who can benefit under the program. Homeowner and investor incentives are still paid, and flow through the servicer to be paid out.