The program stems from orders issued by the Treasury to “14 large residential mortgage servicers and two third-party vendors,” according to a statement from the Treasury’s Office of the Comptroller of the Currency In April 2011, the government determined that 16 companies had used “unsafe and unsound practices related to residential mortgage servicing and foreclosure processing,” the statement said.
As a result of those determinations, the consent orders were issued.
The orders require the servicers to pay for independent consultants to evaluate whether borrowers lost money because of the servicers’ bad behavior during foreclosure proceedings. If the independent reviewer finds errors in a particular case, the servicer is required to pay restitution to the harmed borrower or offer some other form of remediation — including the suspension or cancellation of a foreclosure.
But the opportunity for homeowners to apply for a no-cost review by a third-party consultant is coming to a close.
Homeowners who “believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to their primary residence between January 1, 2009 and December 31, 2010” must submit a request for the review of their foreclosure proceedings by Dec. 31, the Comptroller of the Currency’s Office said.
Examples of injuries that homeowners may have suffered because of errors include, but are not limited to: a foreclosure sale that occurred while the homeowner was waiting for a decision on a mortgage modification, a balance at the time of foreclosure that was higher than what was actually owed and a foreclosure that went forward although the homeowner was following a loan modification plan.