Foreclosure review deadline, extended
who think they may have been victims of unfair foreclosure process
between the years 2009 and 2010 have two more months to ask the federal government
to review the proceedings.
The Independent Foreclosure Review intends to determine whether individual homeowners suffered financial harm and should receive compensation or other remedy because of errors, misrepresentations, or other deficiencies that may have occurred during their home foreclosure process.
Request for review have been extended to September 30, 2012. The Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System (Federal Reserve) emphasized that ex-homeowners who believe that they have been financially injured due to the errors in foreclosure actions on their homes in 2009 or 2010 will be duly compensated, provided that the foreclosure was done by one of the 27 lenders participating in the process.
The government has released guiding rules to follow in calculating for the compensation. Such compensation could be in a form of a lump-sum payment, suspension or cancellation of a foreclosure, loan modification, loss mitigation assistance, correction of credit reports, or correction of deficiency amounts and records.
It has been reported that lump sum payments can range from $500 to $125,000 plus equity.
Eligibility for Independent Foreclosure Review includes the following:
a. The property securing the loan was the borrower’s primary residence.
b. The mortgage was in active foreclosure process (initiated, pending, or completed) at any time between January 1, 2009 and December 31, 2010.
c. The mortgage was serviced by participating mortgage servicer.
The newly released guidelines do not cover all possible foreclosure scenarios, but here are some examples of harm that could qualify for compensation.
- Foreclosure in violation of Servicemembers Civil Relief Act.
- Foreclosure in violation of federal bankruptcy laws.
- Foreclosure of a borrower not in default.
- Failure to convert qualified borrower to a permanent modification following a successful completion of a written modified payment plan.
- Foreclosure while a borrower is complying all requirements of a written modified payment plan.
- Turning down loan modification application that should have been approved.
- Failure to offer loan modification options as required.
- Offering loan modification of higher interest rate that should have been charged under the program.
- Committing errors that did not result in foreclosure but resulted in other financial injury.
Note: Borrowers can still file other actions while requesting the mortgage review. A servicer cannot require a borrower to sign a waiver not to pursue other claims under the Independent Foreclosure Review. And there are no costs associated with the review.
Participating independent foreclosure review lenders:
America’s Servicing Company
Aurora Loan Services
BAC Home Loans Servicing
Bank of America
Everbank/Everhome Mortgage Company
IndyMac Mortgage Services
National City Mortgage
Wilshire Credit Corporation
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