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SALT LAKE CITY — Utah alert! Were you involved in a mortgage foreclosure action in 2009 or 2010? If so, you may be eligible for relief through a widely ignored government program targeting homeowners that have lost the place they call home.
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision announced enforcement action last year against 14 large residential mortgage servicers and two third-party vendors for unsafe and unsound practices related to residential mortgage servicing and foreclosure processing.
Among the sanctions received by mortgage servicers was an obligation to independently review problematic foreclosures. In an effort to reach as many Americans as possible, the government has extended the “Independent Foreclosure Review” program through July 31.
Utah's foreclosure rate is the 10th highest in the nation with one in 592 Utah homeowners receiving a foreclosure filing in May.
Homeowners who lost their home to foreclosure are not eligible to have it returned but may be eligible for a cash payment of up to $2,000. Affected homeowners may also be eligible to have most, if not all, of any deficiency balance waived.
According to data released last week by RealtyTrac, Utah's foreclosure rate is the 10th highest in the nation with one in 592 Utah homeowners receiving a foreclosure filing in May. This is an improvement from April when Utah had the 7th highest foreclosure rate in the country with one in 492 homes receiving a foreclosure filing.
Georgia, Arizona, Nevada, California, Illinois and Florida have the highest foreclosure rates nationwide.
There were more that 6.6 million foreclosures nationwide between Jan. 1, 2009, and Dec. 31, 2010, according to RealtyTrac. A consulting firm acting on this information and on behalf of federal bank regulators mailed almost 4.4 million letters to homeowners who may be eligible to have their foreclosures reviewed for mistakes.
Thousands of Utahns have been deemed eligible for an Independent Foreclosure Review, but have yet to make an application for relief under the program.
The three-month extension provides not only the 14 sanctioned mortgage servicers who may have harmed homeowners more time to notify them of the federal enforcement action, but also the 13 additional mortgage servicers — who joined the program in an effort to identify impacted borrowers — an opportunity for independent foreclosure review as well.
So far, the response has been extremely disappointing.
As of May 31, the independent consultants have received 193,630 requests for review. The servicers themselves, through their own sampling, selected an additional 144,817 cases, for a total of 338,447.
Although the Office of the Comptroller of the Currency believes the number of applications will dramatically increase by the end of July, just 7.7 percent of the estimated 4.4 million homeowners believed eligible have applied for review.
“If a homeowner believes they were wrongfully injured by a foreclosure error in 2009 and 2010, they should request a review,” Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency told KSL. “They give up no rights by requesting a review.”
To be eligible for relief, affected mortgages must have been for a homeowner's primary residence and in active foreclosure between Jan. 1, 2009, and Dec. 31, 2010.
If a homeowner believes they were wrongfully injured by a foreclosure error in 2009 and 2010, they should request a review.
–- Bryan Hubbard, spokesman, the Office of the Comptroller of the Currency
The following mortgage servicers are participating in the Independent Foreclosure Review process:
America’s Servicing Company , Aurora Loan Services, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, EverBank/EverHome Mortgage Company, Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia, Washington Mutual, Wells Fargo and Wilshire Credit Corporation.
The Independent Foreclosure Review should not be confused with the $25 billion national mortgage settlement recently negotiated between most of the states’ attorneys general and the big five mortgage servicers: Bank of America, J.P. Morgan Chase, Citibank, Wells Fargo and Ally Financial (formerly GMAC). Every state in the nation but Oklahoma is participating.
According to the government-mandated oversight website IndependentForeclosureReview.com, some primary examples of mortgage servicer mistakes that may have resulted in financial injury are:
— The mortgage balance was overstated or miscalculated at the time of foreclosure
— Foreclosure proceedings were initiated despite the fact that the homeowner was in bankruptcy, waiting to hear about a request for mortgage modification or abiding by terms of a mortgage modification
— The foreclosure proceedings coincided with active military service.
The Independent Foreclosure Review process is free and can be completed online at www.independentforeclosurereview.com or through the mail. Applications must be processed by July 31 to be eligible for review.
Homeowners in need of assistance can contact 888-952-9105 during normal business hours. In an effort to assist with the application process, the Federal Reserve has put together a short "Independent Foreclosure Review PSA” video. The video provides program details in English and in Spanish.
“Homeowners faced with a foreclosure in 2009 or 2010 should take advantage of this review,” foreclosure defense attorney Carlos Reyes told KSL. “The process is free and totally without fee. Don’t let someone charge you for completing an application that you can complete yourself online in less than 30 minutes.”