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SALT LAKE CITY — Utahns involved in a mortgage foreclosure action in 2009 or 2010 may be eligible for relief through a widely ignored govern mental program targeting homeowners who have lost their homes to foreclosure.
Early last year, 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 against 14 large residential mortgage servicers and two third-party vendors for unsafe and unsound practices related to residential mortgage servicing and foreclosure processing.
Sanctioned by the federal government, mortgage servicers were required to independently review problematic foreclosures. In an effort to reach as many homeowners as possible, the government established an &ldquo ;Independent Foreclosure Review” process.
Homeowners who lost their homes in foreclosure are not eligible to have it returned but may be eligible for a cash payment of up to $125,000. Affected homeowners may also be eligible to have any deficiency balance waived and the mortgage stricken from their credit report.
Only Nevada, Arizona, Georgia, California, Florida, Illinois, Michigan, Colorado and Ohio have higher foreclosure rates than the state of Utah.
Data released last week by RealtyTrac indicates that Utah's foreclosure rate is the 10th highest in the nation with one in 108 homeowners receiving a foreclosure filing in June. This is an improvement from April when Utah had the 7th highest foreclosure rate in the country.
Only Nevada, Arizona, Georgia, California, Florida, Illinois, Michigan, Colorado and Ohio have higher foreclosure rates than the state of Utah.
According to RealtyTrac, there were more than 6.6 million foreclosures nationwide between Jan. 1, 2009, and Dec. 31, 2010. Acting on this information and on behalf of federal bank regulators, a consulting firm mailed almost 4.4 million notices to homeowners deemed eligible to have their foreclosures reviewed for mistakes.
Thousands of Utahns deemed eligible for an Indepe ndent Foreclosure Review have yet to make an application for relief under the program.
While the latest extension provides the 14 sanctioned mortgage servicers more time to notify homeowners of the federal enforcement action, it also allows 13 additional mortgage servicers — who voluntarily joined the program — an opportunity to review their files as well.
“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.”
To date, and notwithstanding one prior program extension, the response has been disappointing.
As of June 30, just more than 214,000 requests have been received for review. Through their own sampling, mortgage servicers selected an additional 144,817 foreclosures for review.
While the Office of the Comptroller of the Currency believes that the number of applications will dramatically increase by the end of September, just 7.9 percent of the estimated 4.4 million homeowners believed eligible have applied for an independent review of their foreclosure.
“If a homeowner believes they were wrongfully injured by a foreclosure error in 2009 and 2010, they should request a review,” Bryan Hubbard, an Office of the Comptroller of the Currency spokesman, told KSL. “They give up no rights by requesting a review.”
To be eligible for relief, a foreclosed mortgage must have been on the homeowner's primary residence and in active foreclosure between Jan. 1, 2009, and Dec. 31, 2010.
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
- Wilshire Credit Corporation
The Indepe ndent Foreclosure Review should not be confused with the $25 billion national mortgage settlement recently negotiated between the states’ attorneys general and five major mortgage servicers: Bank of America, J.P. Morgan Chase, Citiba nk, Wells Fargo and Ally Financial (formerly GMAC). Every state in the nation with the exception of Oklahoma is participating in the settlement.
According to the Independent Foreclosure Review website, primary examples of mortgage servicer mistakes that could 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 Indepe ndent Foreclosure Review process is free to homeowners and may be completed online at www.in dependentforeclosurereview.com, by telephone by calling 888-952-9105 or through the mail.
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.
Applications must be processed by Sept. 30 to be eligible for review.
