An estimated 4.4 million homeowners were deemed eligible for the Independent Foreclosure Review that provides a chance to have an “independent” third party review their foreclosures. After numerous claims of mistakes and abusive servicing practices, bank regulatory authorities and mortgage companies came up with the program to ensure transparency in foreclosure. However, the results have been far from satisfactory.
If the reviewing third party finds the mortgage provider or bank guilty of making a mistake, such as foreclosing on a modified loan, the affected homeowner can get a cash payout of up to $125,000 dollars as compensation. Out of the estimated 4.4 million, only 243,000 had applied according to a recent report by the Huffington Post.
The reason behind such a small reaction to a seemingly promising initiative is the small percentage of claims that are actually being declared true. Most of the homeowners that applied have received letters of refusal ambiguously explaining that no issues were found in the bank’s processes. Even worse, but not surprising, are rumors that the there’s no true reviewing being done. Reference: http://mandelman.ml-implode.com/2012/02/insider-says-wells-fargos-independent-foreclosure-review-for-occ-is-a-sham/
There are two very important things to be considered here. First of all, there always are chances of error in organizational processes, and there have been enough reported cases in the past to validate the opinion that banks and mortgage providers are susceptible to make errors. Secondly, there is a clear conflict of interest when it comes to banks reviewing their own cases.
If errors are found in handling of any cases, the bank has to pay up to $125,000 dollars to the affected homeowner. If all 4.4 million apply, and even 25% of their claims are found true, the banks will end up losing $137,500,000,000 dollars. That number alone should prompt the regulatory authorities to stop the banks and mortgage companies from reviewing their own cases and to ensure an increased third party involvement.
The foreclosure defense attorneys at Amerihope Alliance Legal Services recommend you contact us immediately if you believe your case was mishandled, the attorneys can provide you the best advice after gathering information about your foreclosure.
We are hopeful that the Independent Foreclosure Review Program would be improved further and new regulations would be introduced in the near future. We would keep our readers updated through this platform. Kindly leave your comments in the comments section and subscribe to the mailing list.