Fourteen large residential mortgage servicers last year were required by the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision to retain independent consultants to review their foreclosure actions, according to a commentary today in the Washington Post. This was the result of widespread complaints by consumer advocates and borrowers about deceitful and improper foreclosure practices by some mortgage servicers. If consultants find fault during the review, then borrowers who suffered financial injury because of errors, misrepresentations or other problems in the foreclosure process may get money or some other remedy. At the end of last year, a consulting firm acting on behalf of federal bank regulators sent 4.3 million letters to individuals who might be eligible to have their foreclosures reviewed. Through May 17, more than 194,000 people responded, asking for a review. Another 142,000 people have been selected for review because their foreclosures were related to a bankruptcy or the foreclosure might have violated the Servicemembers Civil Relief Act, which provides certain rights to members of the military. To also qualify, the foreclosure had to be on the person’s primary residence and the mortgage servicer had to come from one of 14 participating companies. The deadline for requests to get a review by an independent consultant is July 31.
