Updated July, 2012

Borrowers who lost their homes to foreclosure may be eligible for money or other remedy if the foreclosure was made out of error or misrepresentation by mortgage servicers. In response to complaints made by borrowers and consumer advocates regarding deceitful and erroneous foreclosure practices, federal banking regulators have been conducting an independent review to investigate any errors that may have been made by mortgage servicers during foreclosure processes.

Borrowers qualify for foreclosure review if they meet all of the following criteria:

  • the borrower’s primary residence was the property securing the loan;
  • the mortgage was in the process of foreclosure (initiated, pending or completed) at any time between January 1, 2009 and December 31, 2010; and
  • the mortgage loan was serviced by one of the participating mortgage servicers. For a complete list of applicable mortgage servicers, click here.

Requests for reviews made by eligible borrowers currently going through the foreclosure process will receive priority attention, and may prevent foreclosure. Also eligible for relief are borrowers who entered a payment plan or modification program, borrowers who sold their home in a short sale and borrowers whose homes were slated for foreclosure but were able to become current on payments and avoid foreclosure.

Reviews will consider various errors potentially made during the foreclosure process, including whether the mortgage balance was listed incorrectly on mortgage statements and whether the mortgage payment and the fees charged by the mortgage servicer were incorrect. Errors will also be evaluated to include foreclosures that occurred after the borrower submitted all paperwork on time in expectation of a loan modification.

Visit www.IndependentForeclosureReview.com to request a review. Request forms may be mailed or submitted online. For help completing the form or any additional questions, call 1-888-952-9105. Reviews are free and must be requested by September 30th, 2012.

first tuesday take

Without lenders being required to reach out to borrowers in order to remedy their own fraudulent conduct, it is little wonder why foreclosure reviews are not providing widespread relief for borrowers. Largely ineffective, nationally only 194,000 out of 4.3 million eligible borrowers have requested a review, with 142,000 receiving some form of relief.

Related article:
Mortgage regulators to regulate… themselves?

Brokers and agents can work to bridge the gap between the government, lenders and disenfranchised homeowners by creating awareness amongst their clients regarding borrower eligibility for financial relief. The most diligent brokers and agents will be remembered for future real estate transactions because of their helpfulness in reaching out to clients. Real estate professionals can include information on foreclosure reviews in their FARM Letters and other materials being sent out to clients.

Related article:
FARM Letter: The new Borrower Outreach Program

With the deadline to request a foreclosure review soon approaching, brokers and agents need to make sure to spread the word now!

Re: Clock running on foreclosure reviews from The Washington Post