New Program May Compensate Homeowners for Errors in their Foreclosure

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On November 1, 2011, the Federal Reserve Board announced that homeowners who believe they were financially harmed during the mortgage foreclosure process by certain banks and other lending institutions in 2009 and 2010 may be entitled an independent review and potential compensation.

This new government initiative to address the ongoing mortgage foreclosure crisis throughout Florida and the country is called “Independent Foreclosure Review.” Similar to an audit, this program offers the opportunity for a review of the homeowner’s mortgage foreclosure case by an independent consultant to determine if errors, misrepresentations, and other deficiencies made by the lender may have caused financial harm to the borrowers. If so, homeowners may be financially compensated.

Some examples of such errors, misrepresentations, and deficiencies are as follows:

• The mortgage balance amount at the time of the foreclosure action was more than was actually owed.
• The homeowner was doing everything the modification agreement required, but the foreclosure sale still occurred.
• The foreclosure action occurred during bankruptcy.
• The homeowner requested a modification, submitted complete documents on time, and was awaiting a decision when the foreclosure sale occurred.
• Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
• The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Borrowers are eligible for a review if their primary residence was in the foreclosure process in 2009 or 2010, whether or not the foreclosure was completed.

Additionally, the mortgage loan must be with one of the following 14 participating lenders:

• America’s Servicing Company
• Aurora Loan Services
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• Everbank/Everhome
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• Metlife Bank
• National City
• PNC
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia
• Washington Mutual
• Wells Fargo

The program also requires mortgage lenders and loan servicers to correct other deficiencies in residential mortgage loan servicing and foreclosure practices going forward. Among others, servicers must specify a single point of contact for certain borrowers who are having difficulty paying their mortgages, ensure that foreclosures are not pursued when a borrower is performing on a loan modification, and establish controls as well as oversight over their third-party vendors.

Participating lenders are currently mailing letters titled “Independent Foreclosure Review” to homeowners who may qualify for a review of their loans, along with an application packet. The application form must be received by April 30, 2012.

To learn more about the program, please visit www.independentforeclosurereview.com or call  888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET), and Saturday from 8 a.m. to 5 p.m. (ET).

For homeowners who do not qualify for an independent foreclosure review under this program, there are still options, including available foreclosure defenses and bankruptcy.  The foreclosure and bankruptcy attorneys at PERENICH The Law Firm have decades of experience representing distressed homeowners and helping them stay in their homes or discharging any deficiency judgment liability to the banks following foreclosure.