Between 2009 and 2011 a lot of people faced home foreclosure for different reasons. Some were unprepared when their ARM mortgage adjusted to a higher rate. Others faced a loss of income in the household and were unable to keep up. Whatever the reasons home owners fell behind, banks were busy, so busy that many home foreclosure documents were “robo-signed” without being properly reviewed.
Robo-signing was just one of many transgressions banks were found guilty of when the Office of the Comptroller of the Currency finally got around to enforcement beginning in late 2010. For many, however, the discovery of these unethical practices did not come in time to save their homes. Critics somewhat blame the OCC for the fact that foreclosures got out of hand but see how it happened. The OCC works on a federal level, whereas foreclosures are more so processed at the state level.
The OCC, the Federal Reserve, and Office of Thrift Supervision began to move into a sort of “damage control.” In April 2011, they reached a settlement with 14 mortgage servicers in attempts to right the wrongs that many suffered from during the home foreclosure crisis. As part of the agreement, borrowers need to be provided a contact person in the event they have questions concerning their mortgage. Consultants are also reviewing 2009 and 2010 foreclosures in attempt to identify any wrongdoing by mortgage companies and properly compensate homeowners, or former homeowners, in the process.
Like any exercise in damage control, consultants will no doubt have their work cut out for them. Often it is not the lenders or the regulators who are best able to identify when something was not right during the home foreclosure process; it is those who actually faced one of these foreclosures. Because of this, borrowers who did not receive the proper support are invited to have their foreclosure cases looked at more closely by notifying officials through July 31 if they believe they were victims of a mistake or unethical practices.
Losing one’s home to foreclosure is a devastating experience, and although most cannot recover their home, they may have a chance at compensation that will help them recover and move forward once again.
Source: Reuters, “U.S. regulator said slow to see mortgage servicing risk,” David Clarke, June 1, 2012