The Treasury Department is planning to rate mortgage companies on how they treat customers as part of the Obama administration's $75 billion foreclosure relief effort.
The new report will include measurements of how each company is handling borrowers and is expected by July, Treasury Secretary Timothy Geithner told Senate lawmakers on Thursday.
More than 100 companies participate in the program, which is designed to help up to 4 million borrowers avoid foreclosure.
Speaking in unusually strong language, Geithner said many companies "are not responding to the needs of responsible and increasingly desperate homeowners."
If they don't comply with the program's rules, he said, "We will withhold incentives or demand their repayment."
The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Mortgage companies get taxpayer incentives to reduce borrowers' monthly payments. Homeowners have to complete at least three months of payments to qualify for permanent loan modifications.