By: Office of the Judge Advocate General, Code 16
Office of the Comptroller of the Currency (OCC) recently announced an independent foreclosure review. Under enforcement actions taken in April by the OCC, the Federal Reserve, and the Office of Thrift Supervision, 14 large mortgage servicers were required to correct deficiencies in their servicing and foreclosure processes and to engage independent firms to conduct a multi-faceted independent review of foreclosure actions that occurred in 2009 and 2010.
The independent consultants are charged with evaluating whether borrowers suffered financial injury through errors, misrepresentations, or other deficiencies in foreclosure practices and determining appropriate remediation for those customers. Where a borrower suffered financial injury as a result of such practices, the consent orders require remediation to be provided.
Earlier this month, the 14 mortgage servicers covered by the enforcement actions began mailing letters to eligible borrowers regarding the independent review process. The letters explain how to request a case review if the borrower believes he or she suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to the borrower’s primary residence between January 1, 2009 and December 31, 2010.
Examples of situations that may have resulted in financial injury are:
•The mortgage balance amount at the time of the foreclosure action was more than the borrower actually owed;
•The borrower was doing everything the modification agreement required, but the foreclosure sale still occurred;
•The foreclosure action occurred while the borrower was protected by bankruptcy;
•The borrower requested assistance/modification, submitted complete documents on time, and was waiting for a decision when the foreclosure sale occurred;
•Fees charged or mortgage payments were inaccurately calculated, processed, or applied; and
•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.
Requests for a review must be received by April 30, 2012. For more information about the review and claim process, including a list of participating mortgage servicers, go to www.independentforeclosurereview.com.
Assistance with requesting a review and answer to questions about the process are available at 1-888-952-9105, Monday through Friday from 0800 to 2200 (EDT) and on Saturdays from 0800 to 1700 (EDT).
In addition to the outreach and claims program, independent consultants will also review a variety of sample cases from each servicer. Where they identify issues, they will conduct additional secondary reviews to indentify as many affected borrowers as possible.