There’s a new sheriff in town. Well, technically, it’s not a new sheriff. But there’s a new consent order coming from the very, very top as a result of possible improper foreclosure practices.
Here’s the long and short of it: As part of the settlement associated with the robo-signing debacle of 2010 (title my own), fourteen mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.
These 14 mortgage servicers have begun to send out letters to 4.3 million potential victims of robo-signing. These letters will provide homeowners the opportunity to request an independent review of their foreclosure process (a.k.a. Independent Foreclosure Review). If the review finds that financial injury occurred as a result of errors, misrepresentations, or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or another remedy.
Here are some FAQs that may help you wrap your head around this latest news impacting the wacky world of distressed properties:
What foreclosure actions are part of the Independent Foreclosure Review?
- The property was sold due to a foreclosure judgment.
- The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
- The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
- The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.
What are the eligibility criteria to receive compensation or another remedy?
- Your mortgage loan was serviced by one of the participating mortgage servicers.
- Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
- The property was your primary residence.
Who are the participating servicers? America’s Servicing Company, Aurora Loan Services, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, EverBank/EverHome Mortgage Company, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia Mortgage, Washington Mutual and Wells Fargo Bank, N.A.
How does my mortgage loan get reviewed as part of the Independent Foreclosure Review? Homeowners that meet the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. (Homeowners must submit a Request for Review Form postmarked no later than April 30, 2012.)
How will the bank know where to find me (to send me my letter) if I have already lost my home to foreclosure? Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. If you received the notification letter, you can send in your Request for Review Form in the prepaid envelope provided, postmarked no later than April 30, 2012. You can also call 1-888-952-9105.
Remember that this new settlement is just that—a settlement. This Independent Foreclosure Review does not stop any foreclosure proceedings currently scheduled, and this is not a moratorium on future foreclosure activity.
So, if you have any clients who may have heard bits and pieces of this information (or bits and pieces of information about the new HARP program), make sure to help them understand the scope of the Independent Foreclosure Review.