Obama administration criticizes JPMorgan over mortgages

NEW YORK -- The Obama
administration criticized JPMorgan Chase
on Wednesday for failing to effectively
assist struggling homeowners. In the November edition of the
administration's "Housing Scorecard" on

the performance of mortgage servicers,
Chase ( , Fortune 500) "was found to be in need of substantial
improvement" in its dealings with homeowners, the departments of Treasury and Housing and Urban
Development said in a statemen

The report came in conjunction with the
administration's Making Home
Affordable program, which works with
mortgage services to help homeowners
in danger of foreclosure. The report said Chase needed to
improve its communication with
struggling homeowners and has
demonstrated a "lack of progress in
implementing previously identified
improvements.

" As a result, the Treasury Department will withhold
servicer incentive payments to the bank
for the third consecutive quarter. Tom Kelly, a spokesman for Chase, said
in an email that the bank was
"disappointed with our rating, and will
continue to work hard to improve our
processes and controls." The Treasury Department is also
withholding servicer incentive payments
from previous quarters for Bank of
America ( , Fortune 500) due to its limited improvements in performance
versus prior months. Rick Simon, a spokesman for BofA, said
in an email that the bank had made
strides in assisting homeowners, with
more than 180,000 of its customers
completing modifications under the
Obama administration's Home Affordable Modification Program
(HAMP).

"In spite of progress made, the
committee has chosen to continue to
withhold incentive payments," Simon
said. "While we are disappointed with
this decision, these financial incentives
do not drive our efforts to help our customers in need of assistance." Chase and BofA were among the banks
named in a lawsuit filed last week by Massachusetts Attorney General
Martha Coakley that accused them of large-scale fraud in the foreclosure
process.

The Obama administration has unveiled a variety of programs to assist homeowners and promote loan
modifications, though these initiatives
have had limited success. The Home
Affordable Modification Program has
secured 1.7 million trial modifications
since it began in 2009, Wednesday's report said, though the program has
fallen short of initial promises to lower
mortgage payments for 3 to 4 million
borrowers.(cnnmoney.com)