Weitz- a new agreement was announced in which servicers (Banks) have agreed to provide “thorough” reviews of the foreclosure process for millions of homeowners. As usual, I’ll provide thoughts throughout.
WASHINGTON — More than 4 million borrowers who have faced foreclosure since early 2009 will have the chance to have their cases reviewed for potential wrongdoing, federal regulators and some of the nation's largest mortgage servicers announced last week.
The reviews stem from a deal earlier this year in which 14 servicers agreed to hire independent consultants to evaluate whether borrowers suffered financial injury during the foreclosure process. If a review finds errors or abuses by the financial firms, the consultants will determine what recompense wronged homeowners deserve.
Weitz – Note that the “Independent Contractors” are hired by those that they are conducting reviews of – how’s that for a conflict of interest?! You think these “Independent” contractors will have the incentive to be harsh on those writing their checks?
On Tuesday, servicers began mailing letters to the estimated 4 million borrowers whose loans were in the process of foreclosure between Jan. 1, 2009, and Dec. 31, 2010, detailing how to request a review of an individual case.
Officials at the Office of the Comptroller of the Currency (OCC), which crafted the April servicer agreement along with the Federal Reserve, said the mailings would continue through the end of the year and be accompanied by a large-scale marketing campaign to make borrowers aware of the effort.
Additional information is available at www.IndependentForeclosureReview.com or 1-888-952-9105.
Requests for review must be received by April 30.
"There is no cost to the borrower for this review," said Joe Evers, deputy comptroller for large banks at the OCC.
Under the agreement, the servicers are required to foot the bill for the outside consultants conducting the reviews. Evers and other OCC officials said Tuesday that "a great deal of effort has been taken to ensure that the independent consultants are truly independent" and that the servicers will be prohibited from influencing the findings.
Weitz – Riiiiiiight.
While eight consultants are working on behalf of the servicers involved, officials said they had spent months developing a common website and call center, as well as common branding and marketing materials, in an effort to make the process equitable for each eligible borrower.
Examples of financial injury might include unwarranted or miscalculated fees charged to borrowers, a foreclosure that happened while a borrower was already in bankruptcy protection, or a property that underwent a foreclosure sale even as the borrower was awaiting word on a loan modification from the servicer.
Details about how long it will take to conduct the reviews, what sort of redress homeowners stand to gain, and what rights they might have to sign away in exchange for compensation remain unresolved.
These will be thorough reviews, reviewing every aspect of the foreclosure," Evers said. He said officials hope to complete the reviews in a matter of months after the final deadline, but he acknowledged the mountain of work involved
OCC officials on Tuesday also said no decision had been made yet about what type of compensation borrowers will be entitled to if the reviews show they were the victims of errors or misrepresentations.
Weitz – another major pitfall of the program. How do you quantify an improper foreclosure? You can’t just get your house back – someone else is now the rightful owner of it. The only compensation will be monetary in nature and I’m guessing that the banks are not going to be proactive in writing large checks.
It also remains unclear whether borrowers might be required to waive their right to sue the financial firms involved in exchange for compensation.
The April deal also imposed a host of other requirements on the servicers involved, including that they provide a single point of contact for struggling borrowers, many of whom have complained of getting the runaround when they try to get help.
Weitz – Despite all my criticisms, I will still encourage clients to pursue this option if they have been foreclosed upon. Its free to apply and its certainly possible there will be some compensation involved.
For more information on your rights in foreclosure, short sale or other distressed property situations, consider contacting a Seattle Foreclosure Attorney.
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First of all, thanks for sharing this update. It might help a lot of people. Second, this one should already be a lesson for possible prospects who wants to become a borrower. They should know about this so that they won't end up in the long run being among these kinds of borrowers.
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