Rep. Maxine Waters (D-Calif.) blasted Treasury Department officials and banking regulators Thursday during a hearing that focused on the impact that improper paperwork and “robo-signing” have had on the government’s mortgage modification program.
The hearing, hosted by the House Financial Services Subcommittee on Housing and Community Opportunity, came just days after another government panel warned that the same irregularities that caused banks to temporarily halt foreclosures earlier this year may be undermining the government’s mortgage modification program.
That program, known as the Home Affordable Modification Program, is part of TARP.
Waters — who chairs the subcommittee and is facing her own TARP-related scandal — had harsh words for a panel that included officals from the Treasury Department, the Office of the Comptroller of the Currency and the Federal Housing Finance Agency, among others.
“I’d like to thank you for basically reiterating what you’ve said over and over again,” an exacerbated Waters said in response to government officials insisting they were monitoring potential problems with the mortgage paperwork and the Home Affordable Modification Program.
Waters repeatedly questioned officials about what type of penalties mortgage services have suffered when they fail to comply with the rules of HAMP.
Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, said servicers have been required to re-evaluate homeowners for HAMP and to invite applications from homeowners who may have been passed over. “That’s not a penalty,” Rep. Stephen Lynch (D-Mass.) told Caldwell.
Caldwell ultimately conceded that no servicer has suffered monetary penalties under HAMP despite widespread complaints by borrowers of servicers who are inefficient and violate the program’s rules.
Meanwhile, John Walsh, the acting head of the OCC, said that the regulator hasn’t levied fines, issued cease-and-desist orders or threatened to revoke the charters of any servicer.
“Do you think the servicers really believe you mean business if they don’t have to (face) any consequences?” Waters said. “Why should they take you seriously?”