More than 300,000 past foreclosure actions have been slated for evaluation under an independent review process announced last month by the federal government.
According to statistics provided by the Office of the Comptroller of the Currency (OCC), a part of the Treasury Department, the government has mailed out nearly 4.4 million letters and forms announcing the program. So far, 338,447 foreclosure actions have been slated for review.
To qualify a borrower must have faced a foreclosure action between January 1, 2009 through December 31, 2010. The program is open only to individuals who faced the foreclosure of a prime residence; not to investors. Also, borrowers can only obtain reviews if their servicer participates in the program. A list of participating servicers can be found at IndependentForeclosureReview.com
Under the program awards can vary from $500 to — in the worst cases — as much as $125,000 plus lost equity. However, the review process can take several months and because the program was only introduced in late May there have as yet been no awards. Not all reviews, of course, will result in awards.
According to the government, borrowers may be able to collect compensation when they have suffered a financial injury. Examples include, but are not limited to:
- Foreclosing on a borrower in violation of the Servicemembers Civil Relief Act;
- Foreclosing on a borrower who was not in default on the mortgage;
- Failing to convert a qualified borrower to a permanent modification after successful completion of a written modified payment plan that was supposed to lead to permanent modification;
- Foreclosing on a borrower prior to expiration of a written modified payment plan that leads to permanent modification, while borrower was performing all requirements of the written plan;
- Denying a borrower’s loan modification application that should have been approved;
- Failing to offer loan modification options as required by an applicable program;
- Giving a borrower a loan modification with a higher mortgage rate than should have been charged under the relevant loan modification program;
- Foreclosing on a borrower in violation of federal bankruptcy laws;
- Not providing a borrower with proper notification during the foreclosure process; and
- Committing errors that did not result in foreclosure, but resulted in other financial injury.