Borrowers can request independent foreclosure review

November 02nd, 2011

Federal regulators have issued guidance requiring the 14 largest mortgage servicers to contact people who may have been financially harmed by wrongful foreclosure practices. The Office of the Comptroller of the Currency released guidance that these mortgage servicers must mail letters to borrowers notifying them of the right to request review of their cases by independent consultants.

The reviews are being initiated after it was revealed last year that "robo-signers" were signing foreclosure documents without properly evaluating them.

Compensation for financial harm

Cases that are slated to be reviewed involve foreclosures that occurred in 2009 and 2010, according to the Office of the Comptroller of the Currency. Even if a foreclosure was not completed, the borrower can request an independent review. Once the cases are examined, borrowers could be compensated for suffering financial harm related to errors, misrepresentations or other deficiencies.

Borrowers must request reviews, which are free of charge, by April 30, 2012. Only foreclosures on borrowers' primary residences qualify for review under the program.

"The Independent foreclosure review is a significant component of the mortgage servicers' compliance with our enforcement actions," acting Comptroller of the Currency John Walsh said in a statement. "These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices identified in our enforcement actions."

Avoiding foreclosure

You may be hoping to take advantage of low refinance rates--underwater homeowners who refinance through HARP may be able to lower their foreclosure risk. A refinance calculator can help you figure out if refinancing can improve your situation. When you use a loan calculator, it is important to be as accurate as possible with your inputs. Then, compare mortgage rates from several lenders. Use a compare loans calculator to find the best deal and understand different loan options.

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