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Is your foreclosure eligible for review?

Step One begins in the effort to redress foreclosure abuses as independent auditors scour 14 banks' foreclosure files. Find out if yours qualifies.

By MSN Money Partner Nov 28, 2011 9:18AM

This post comes from Marilyn Lewis at MSN Money.


Are you one of 4.5 million mortgage borrowers whose home -- it has to be your primary residence -- was in "any stage" of the foreclosure process in 2009 or 2010? If you were hurt financially by bad bank behavior, this could be your chance to tell your story and get help.


Independent auditors now are reviewing foreclosure cases covered by an April enforcement action by federal agencies against 14 banks and mortgage servicers, the companies that send borrowers their mortgage statements and collect their payments. Post continues below.

The Office of the Comptroller of the Currency, the Federal Reserve and other agencies are requiring banks that violated consumer protections, causing "financial injury," to fix or redress them. That apparently includes robo-signing, says MarketWatch columnist Lew Sichelman.


Are you eligible for review?

There could be a lot at stake for you, MarketWatch explains:

If the auditor identifies instances of financial injury or harm, servicers will be required to develop a remediation plan and make appropriate restitution. You may not be able to get your house back if it has already been repossessed, but you could be eligible for a monetary settlement. And the payout could be substantial.

You're eligible for the review only if:

  • Your bank is one of the 14 and their affiliates.
  • Any type of foreclosure action at all was taken against your home in that two-year period.

The independent auditors are supposed to identify "which borrowers (were) directly affected by fraudulent and messy practices," HousingWire says.


This Q&A, at the OCC site, explains the basics. Here's the Independent Foreclosure Review site, set up to help consumers.


HousingWire names the auditing companies and the banks they're assigned here.


If you're eligible, you're supposed to get a letter by mail before Dec. 31 with information, directions and a form to return. The form has to be postmarked by April 30, 2012.


Get the details

Have questions? Haven't received a letter and think your loan is covered? Unsure who your servicer is? You can call (888) 952-9105 (Monday-Friday, 8 a.m.–10 p.m. Eastern; Saturday 8 a.m.–5 p.m. Eastern.)


If you can't get through, you could try the OCC at (800) 613-6743 or by writing to: OCC Customer Assistance Group, 1301 McKinney St., Suite 3450, Houston, Texas 77010.


The OCC says you don't need a lawyer. But, "if your mortgage loan meets the initial eligibility criteria and you are currently represented by an attorney with respect to a foreclosure or bankruptcy case regarding your mortgage, please refer to your attorney," according to the Q&A.


No end date is given. The OCC says it'll take at least several months before auditors can go through each file and notify borrowers by letter whether they'll receive compensation.


HousingWire describes how the auditors are tackling the job and what they're looking for:

The reviews will determine whether the servicer or attorney properly documented ownership of the mortgage and whether it was done under state and federal law. The consultants will determine if a foreclosure sale occurred while the borrower was in a modification or under consideration for some other loss-mitigation tool, such as a short sale. The reviews will cover any inappropriate fees charged outside of state or federal law.
Interestingly, the consultants will also check to see if guidelines for HAMP and even the banks' own proprietary program were followed correctly.
Then, the review will seek to determine if any of these errors or misrepresentations resulted in direct financial injury.

The review process is described in detail in a newly issued OCC report, "Interim Status Report: Foreclosure-Related Consent Orders," (.pdf file.)


Industry still "profoundly" plagued

MarketWatch quotes Raj Date, "de facto head" of the new Consumer Financial Protection Bureau, as saying that the mortgage-servicing sector still is "plagued by pervasive and profound consumer protection issues."


The bureau "is working with other federal and state regulators to develop 'common sense' national mortgage servicing standards," but can't really get moving until the state attorneys general finish their separate, drawn-out negotiations with banks over foreclosure practices, MarketWatch writes.


Fox Business reported in October that President Obama has been trying to get the states and banks to wrap up an agreement:

People at the big banks say the Obama Administration is prodding the state AGs, led by Iowa's Tom Miller, to agree on a deal that is currently on the table that calls for fines and revised mortgage foreclosure practices -- but also limits banks' liability on legal action.

More on MSN Money:

Feb 12, 2012 9:40PM
About a month ago, I received the form used to participate in an Independent Foreclosure Review by virtue of losing my home to a short sale.

The only bright spot in the form was an open ended question asking me to describe any other way I may have been financially injured by the foreclosure process.

Oh, yes. Hard not to bite on that one.

After composing my response, I sent hard copies to the Independent Reviewer, the House and Senate Finance committees, and the chief executives of PNC.

And I posted it on my website:

After a day or so of reflection, I thought it might make for a good template for others to use to share their stories. I worked it up and posted it:

I would like to encourage anyone who has been through the experience to use the template as a basis for capturing their story, and then sending copies to members of congress - both the House and Senate Finance committees and other state representatives. The key addresses are in the template.

There are at least three million of these stories, and all of them should be heard (or at least carried into their offices) as testimony to the scale and nature of the catastrophe. Make it concrete - "three million" is too abstract to really wrap your mind around. A few truckloads of letters might give them a better sense of the magnitude of the issue.   

I would suggest email, or web forms, but they're just too easy to ignore. And delete. Sure, some trees may have to die, but at least it's for a better cause than more real estate circulars.
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