Mortgage servicers are dragging their heels when it comes to helping financially-strapped homeowners, sabotaging government efforts to heal the housing market.

Mortgage companies, which typically collect a percentage of the value of the loans they service, can make even more money when loans become delinquent, collecting additional fees for insurance, appraisals, title searches and legal services.

Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure.

And though the Obama administration’s foreclosure program gives servicers $4000 for each home they modify, mortgage companies often make far more collecting fees from delinquency, and then more fees through the sale of homes in foreclosure.

“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” Margery Golant, a Florida lawyer who defends homeowners against foreclosure told The New York Times.

“I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”

The federal foreclosure protection program falls far short of its goals and denies applicants the chance to appeal or correct errors or misinformation, according to a federal class action filed against Treasury Secretary Timothy Geithner, Courthouse News Service reports.

Named as defendants with Geithner are the Federal Housing Finance Agency, the Federal Home Loan Mortgage Corp., the Federal Home Loan Mortgage Association, Ocwen Loan Servicing, and GMAC Mortgage.