HAMP was started in February 2009 by the Treasury Department and the Federal Housing Finance Agency after the foreclosure crisis. Under the plan, at least $75 billion was directed to participating mortgage-servicing companies to help financially distressed mortgage-holders modify their mortgages.
Reuters reported that Saxon received a $634 million commitment of HAMP funds, of which $65.8 million has been received, the plaintiffs claim.
Saxon has spent $12.25 million so far to subsidize homeowners, according to a June 30 report by ProPublica, a non-profit Web site for investigative journalism. About $29 million of Saxon’s total HAMP funds went to the company and $24 million benefited investors, ProPublica said.