The nation's largest mortgage loan servicers have done a poor job in modifying distressed home loans through the government's foreclosure prevention program and need "substantial improvement," the Obama administration said Thursday. Based on a recent audit, Bank of America, Wells Fargo and JPMorgan Chase will lose government financial incentives — which reach at least $1,000 for a permanent loan modification — until they improve, the Treasury Department said. They received $24 million in such incentives last month.
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The audits checked performance areas such as how well servicers dealt with homeowners and evaluated them for modifications, which could include lower interest rates.
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The government's auditor found that BofA, JPMorgan Chase and Wells Fargo all calculated incomes incorrectly on more than 22% of audited loans.
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