Major mortgage servicers have agreed to review foreclosure cases that occurred between January 1, 2009 and December 31, 2010 and determine if borrowers suffered financial losses as a result of any of unfair practices. The reviews are part of a larger enforcement action taken against 14 large mortgage servicers last April by the Office of the Comtroller of the Currency ("OCC"), the Federal Reserve and Office of Thrift Supervision ("OTS") in the wake of the "robo-signing" scandal.
As part of that action, the lenders, which include Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500), Citibank (C, Fortune 500), GMAC Mortgage, HSBC (HBC) Finance, Wachovia, Washington Mutual and Wells Fargo (WFC, Fortune 500), agreed to clean up their foreclosure practices and repay victims.
More than 4 million mortgage borrowers who were foreclosed on between 2009 and 2010 will have a chance to request an independent review of how their foreclosure process was handled, according to Joe Evers, the deputy comptroller for large banks at the Office of the Comptroller of the Currency (OCC).
Should the review find that "financial injury" occurred as a result of an error or other deficiencies in the way the foreclosure process was handled, the homeowner may receive compensation for their losses. However, just how much money the borrower will receive has yet to be determined, said Evers.
"The independent foreclosure review is a significant component of the mortgage servicers' compliance with our enforcement actions," said acting Comptroller of the Currency John Walsh.
When foreclosures flooded the system after the housing bust, many mortgage servicers became more cavalier in the way they handled foreclosures. Affidavits and other documents were signed by low-level employees who had little or no knowledge of what they were attesting to, attorneys hired to manage the foreclosure process were providing inadequate oversight and many bank employees were ignoring requirements to halt foreclosure procedures if loans were in the modification process.
Letters will be sent to borrowers starting Tuesday that will explain how to request case reviews. Foreclosures must have been on primary residences. Borrowers have until April 30, 2012 to request reviews. If you don't receive a letter, but think you may qualify, check for more info at http://independentforeclosurereview.com/
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