An important deadline for borrowers who may be eligible to receive compensation for a recent mortgage foreclosure has been extended to December 31, 2012. Under the terms of an April 2011 settlement that the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency reached with a number of mortgage-servicing companies, borrowers who experienced foreclosures in 2009 or 2010 may be eligible to receive a free, independent review of their foreclosure proceedings. If the review identifies errors by the servicer that resulted in financial harm to the borrower, the borrower may receive compensation from the servicer.
Borrowers are eligible to request an independent foreclosure review if they meet the following criteria:
- The foreclosure was initiated, pending, or completed between January 1, 2009, and December 31, 2010;
- The mortgage was serviced by one of the mortgage-servicing companies involved in the settlement; and
- The property securing the loan was the borrower’s primary residence.
Some examples of situations that may have led to financial harm are:
- The mortgage balance amount at the time of the foreclosure action was more than actually owed;
- The borrower was doing everything required under a loan modification agreement, but the foreclosure sale still happened;
- 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; and
- Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
Eligible borrowers who believe they were financially harmed during the mortgage foreclosure process must submit a Request for Review form no later than December 31, 2012, as the first step toward potentially receiving compensation. Because the review process will be a thorough and complete examination of many details and documents, it could take several months to complete.
For more about the independent foreclosure review process, including an explanatory video, a list of the mortgage-servicing companies involved in the settlement, and links to a site containing an online Request for Review form, visit www.federalreserve.gov/consumerinfo/independent-foreclosure-review.htm. Borrowers can also call 888-952-9105 weekdays from 8:00 a.m. to 10:00 p.m. and Saturdays from 8:00 a.m. to 5:00 p.m. for further information. (All listed times are Eastern.)
