The deadline is about three weeks away for homeowners to request a free, independent review of foreclosure actions that were in process during 2009 or 2010.
The program, Independent Foreclosure Review, was set up last year by the U.S. Treasury Department. It applies to mortgages that were serviced by one of 27 companies and went into foreclosure during a two-year period when foreclosure processes were under a cloud of suspicion.
The program stems from orders issued by the Treasury to “14 large residential mortgage servicers and two third-party vendors,” according to a statement from the Treasury’s Office of the Comptroller of the Currency.
In April 2011, the government determined that 16 companies had used “unsafe and unsound practices related to residential mortgage servicing and foreclosure processing,” the statement said. As a result of those determinations, the consent orders were issued.
The orders require the servicers to pay for independent consultants to evaluate whether borrowers lost money because of the servicers’ bad behavior during foreclosure proceedings. If the independent reviewer finds errors in a particular case, the servicer is required to pay restitution to the harmed borrower or offer some other form of remediation — including the suspension or cancellation of a foreclosure.
But the opportunity for homeowners to apply for a no-cost review by a third-party consultant is coming to a close.
Homeowners who “believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to their primary residence between January 1, 2009 and December 31, 2010” must submit a request for the review of their foreclosure proceedings by Dec. 31, the Comptroller of the Currency’s Office said.
Examples of injuries that homeowners may have suffered because of errors include, but are not limited to: a foreclosure sale that occurred while the homeowner was waiting for a decision on a mortgage modification, a balance at the time of foreclosure that was higher than what was actually owed and a foreclosure that went forward although the homeowner was following a loan modification plan.
To be eligible for review, the mortgage that went into foreclosure must have been serviced by one of the following companies: America’s Servicing Co., Aurora Loan Services, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, EverBank/EverHome Mortgage Company, Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia Mortgage, Washington Mutual, Wells Fargo Bank and Wilshire Credit Corporation.
According to the Federal Reserve System’s Board of Governors, as of the end of September, roughly 84,000 homeowners in Maryland had been notified by the servicers that they were potentially eligible for an independent review. About 4,200 Marylanders, as of Sept. 27, have requested a review.
The low response rate may be the result of homeowners’ mistrust of mortgage assistance programs. During the foreclosure crisis, scams proliferated that took advantage of homeowners eager for assistance.
The Independent Foreclosure review is being monitored by federal authorities, is free and will not affect a homeowner’s credit or ability to seek other foreclosure assistance.
“We have found that many consumers do not understand the Independent Foreclosure Review program and have not submitted a request for review even though they are eligible and may have been financially injured as a result of a servicer error,” said Johnette Richardson, executive director of Belair-Edison Neighborhoods Inc., which is helping spread the word about the upcoming deadline.
“We believe that by getting this information out there, explaining the program and answering questions we can encourage the eligible borrowers to take advantage of this effort,” Richardson said.
An independent review may be requested online or by mail. Mortgage borrowers should visit www.independentforeclosurereview.com or call 1-888-952-9105 for more information.
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