Independent Foreclosure Reviews Under Way with 121K Requests
By: Krista Franks Brock
John Walsh, acting Comptroller of the Currency, offered an update and clarification Monday on the foreclosure reviews taking place at 14 servicers as part of the consent orders established last year.
First, Walsh addressed the impartiality of the consultants conducting the reviews, a concern brought to light a few months ago when senators brought up the question in a subcommittee hearing.
Walsh assured his audience at the National Interagency Community Reinvestment Conference in Seattle that the consultants are not under the servicers’ supervision. They “have had no previous role in reviewing the practices or issues they are being asked to review,” and their actions are being overseen by the OCC, Walsh stated.
Independent foreclosure reviews are being instigated in two ways: Consultants are identifying borrowers they believe may have incurred financial harm as a result of improper processing, and borrowers themselves may request a review if they believe they were wronged by their servicers.
Consultants are starting with the review of about a quarter-million loans, but they may increase the volume if they feel it is necessary based on their findings.
The OCC is also attempting to reach about 4.3 million borrowers whose loans are eligible for review through direct mail and advertising.
In November and December 2011, 4.3 million letters were sent to these individual borrowers to inform them that their loans are eligible for review and to let them know how to request a review.
According to Walsh, several tracking methods were employed to find displaced borrowers, and about 5.6 percent of the letters were undeliverable.
In an effort to reach all eligible borrowers, national advertising campaigns are underway for print and online media in both English and Spanish.
The OCC is also encouraging homeowner counselors to make sure borrowers they work with are aware of the independent foreclosure reviews.
Thus far, the website, IndependentForeclosureReview.com has received about 400,000 visits, and more than 175,000 individuals have called a toll-free number to request information.
In total, about 121,000 borrowers have requested reviews, expressing grievances such as they received improper fees, their servicer incorrectly calculated their mortgage balance, their payments were improperly processed, or they encountered issues with a loan modification.
When consultants do find that a borrower suffered financial harm because of actions by his or her servicer, the servicer will be required to provide remediation, which may range from reimbursement of lost equity, repayment for expenses plus interest, or repealing a foreclosure.
“There are no caps or limits to the amount of compensation that will be paid out or remediation actions that will be offered,” Walsh sated.
The OCC will provide a remediation framework to ensure “remediation recommendations are consistent across servicers for similarly situated borrowers.”
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