SAVE MONEY ON TRAVEL DEALS

The federal government currently provides lenders $1,000 for each modified loan that can help rescue a home from foreclosure with additional payments of $1,000 for the next three years, The New York Times reported Thursday.

A recent report by the Boston Fed, however, said "the rules by which servicers are reimbursed for expenses may provide a perverse incentive to foreclose rather than modify."

Lenders collect late fees from homeowners and fees for a variety of foreclosure-related activities, such as appraisals and new title searches for the home in question.

"I don't think (lenders) are motivated to do modifications at all", said Florida attorney Margery Golant, formerly an attorney for Ocwen Financial, a major mortgage company.

But banks dispute the claim that it is more lucrative for them to collect fees than help homeowners.

"To think that somehow or other we would jeopardize investor relationships and customer relationships for the very small incremental income we would receive by delaying seems ludicrous", said Robert James, Bank of America's senior vice president.

 BREAKING STORIES

Bernanke pitches for strong Fed

Crude oil prices rebound Tuesday

Three possible Fed governors named

Fed board seats remain unfilled

USDA accused of risking public health

Postal service delivers bad budget news

Fed Vice Chairman Kohn to retire

FDIC closes banks in Nevada, Washington

FDIC closes banks in Nevada, Washington

Justice asked to probe absent Bush e-mails

FDIC has 702 banks on problem list

FDIC has 702 banks on problem list

USDA facing allegations of discrimination

Governors, White House to meet on carp

Consumers dropping the credit habit

GOP: Obama budget, deficits 'reckless'

Gates, Mullen defend Defense budget

Pentagon: Budget reflects reform goals

Commerce sees decrease in 2011 budget

Senate confirms Bernanke for second term