WASHINGTON -- JPMorgan Chase & Co., one of the nation's largest mortgage lenders, is not doing enough to help Americans avoid foreclosures, the Obama administration said.
The Treasury Department said Wednesday that JPMorgan Chase is still doing a poor job helping people permanently lower their mortgage payments as part of the government's foreclosure-prevention program. The lender has been cited for rejecting people who were eligible for mortgage modifications three separate times since June.
JPMorgan said in a statement that it was "disappointed with our rating" and that it "will continue to work hard to improve our processes and controls."
The government first criticized four lenders – JPMorgan Chase, Bank of America Corp., Wells Fargo & Co. and Ocwen Loan Servicing – in June, and began withholding financial incentives of up to $1,000 per modification.
Wells Fargo and Ocwen, a division of Ocwen Financial Corp., were removed from the list of companies needing "substantial improvement" in September. Bank of America got off the list in December.
The mortgage-aid program was launched in 2009 and was intended to help those at risk of foreclosure by lowering their monthly payments. Borrowers start with lower payments on a trial basis. But the program has struggled to convert them into permanent loan modifications. Homeowners have complained that the program is a bureaucratic mess. Many say they were disqualified after banks lost their documents and failed to return their phone calls. Banks have blamed homeowners for failing to submit needed paperwork.
More than 1.7 million troubled homeowners received trial modifications over the past two years. But as of October, more than half of them – about 880,000 people – have dropped out of the program entirely.
Of the nearly 289,000 homeowners who have started the trial version of the program through JPMorgan, less than half have had their mortgage payments permanently lowered.