The form in the mail promised an independent review of your lender’s foreclosure practices.
However, it looked a lot like come-ons from scammers.
Two clients this week asked if this was real and whether they should sign up.
I read the form and did a little research. I concluded
One, it is real.
Two, it may not make much difference.
The Federal Reserve has required several misbehaving lenders and loan servicers to offer borrowers an independent review of their foreclosure. The mortgage servicers subject to the Fed’s enforcement action are
- GMAC Mortgage,
- HSBC Finance Corporation,
- SunTrust Mortgage, and
- EMC Mortgage Corporation-
The Comptroller of the Currency regulates another class of lenders, and it has required a foreclosure review of this group of servicers
|
Countrywide | National City |
| Aurora Loan Services | EMC | PNC |
| Bank of America | Everbank/Everhome | Sovereign Bank |
| Beneficial | GMAC Mortgage | SunTrust Mortgage |
| Chase | HFC | U.S. Bank |
| Citibank | HSBC | Wachovia |
| CitiFinancial | IndyMac Mortgage Services | Washington Mutual |
| CitiMortgage | Metlife Bank | Wells Fargo |
| Wilshire Credit Corporation
|
The program offers the prospect of money damages where foreclosure procedures were defective.
The New York Time’s Gretchen Mortgenson is not hopeful. Her Christmas Day column detailed charges that the “independent” auditors are in bed with the banks they are supposed to be evaluating.
The National Consumer Law Center is likewise skeptical. NCLC claims the review process may harm homeowners in that it threatens to strip homeowners of their claims with respect to irregularities in the underlying loans.
The servicers subject to review have set up a site to answer questions on the review process.
Letters to eligible homeowners were expected to have gone out in the last two months of 2011. The application must be returned with a postmark no later than April 30, 2012.
We’ll follow this story as it develops.
Image courtesy of ImageMD.
