Millions of Foreclosures Face Scrutiny

Millions Of Foreclosures Face Scrutiny

As part of a settlement agreement reached between regulators and mortgage servicers, 4.5 million foreclosures could face further scrutiny in an independent review process approved by the Office of the Comptroller of the Currency.

The independent foreclosure reviews will examine foreclosures made between January 1, 2009 and December 31, 2010.  Reviewers will examine the foreclosures to find out if they caused unjust financial injury to the homeowner. Financial injury could include foreclosures that took place after a homeowner filed bankruptcy, miscalculated or excessive fees or foreclosures that took place while a homeowner was waiting on a mortgage modification approval.

“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. “These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices identified in our enforcement actions.”

Homeowners who suffered a foreclosure in the timeframe listed above will receive a letter informing them of their right to request an independent review.  The homeowner must then submit a five page form to the mortgage servicer and cooperate in the review process which could take months to complete. There is no cost to participate in the independent foreclosure review and anyone charging for a foreclosure review is probably part of a scam.

Homeowners seeking a foreclosure review only have until April 30, 2012 to submit their paperwork, so if they have not received notification of their eligibility by January, they should probably contact their mortgage servicer.