Wells Fargo, Bank of America and JPMorgan Chase Penalized By Politicians Over HAMP

Banks are not like other businesses. They can’t invest their money as they wish. Instead, they are monitored by activists and politicians and have to behave according to a different set of rules.

No wonder that banks went into big financial trouble with the latest housing crash. They can’t operate according to the dictum of maximizing profits in a free market.

The New York Times reports Jun. 10, 2011:

The Treasury Department announced penalties on Thursday against three of the nation’s largest banks for what it said was poor performance in the government’s main foreclosure prevention program.

The penalties, against Wells Fargo, Bank of America and JPMorgan Chase, are part of a new scorecard for mortgage servicers in the program, known as the Home Affordable Modification Program, or HAMP. (More details are available in the Treasury Department’s release and scorecard.) A fourth mortgage servicer, Ocwen Financial, was also deemed subpar but not penalized.

The program is intended to provide incentives to mortgage servicers and investors to make it more financially advantageous to modify a troubled mortgage, rather than foreclose on it. But since the program began, it has fallen far short of expectations, in part because mortgage servicers have done a poor job of processing applications from homeowners.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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