The carrot didn't work, so the Treasury is going to try its luck with the stick.
Up to now, mortgage lenders and servicers had been encouraged to modify the
mortgages of troubled homeowners through government incentives that they could
collect along the way. That hasn't been working very well, as the number of
modifications actually completed to prevent foreclosures has been far below
Washington's expectations. So the Treasury is trying something new: fining the
servicers that fail to permanently modify as many mortgages as the government
thinks they should be..
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