Lump-sum payments can range from $500 to, in the most egregious cases, $125,000 plus equity.
The review process is part of a series of steps taken by the Fed and the Comptroller of the Currency to implement April 2011 requirements that mortgage lenders and servicers correct what the agencies called "unsafe and unsound mortgage-servicing and foreclosure practices."
Regulators required mortgage servicers to employ independent consultants to review foreclosures that were in process in 2009 or 2010 and to provide compensation if their actions caused financial injury to the borrowers.
Actions that could have resulted in financial injury include:
Foreclosing on a borrower who was not in default on a mortgage.
Failing to convert a qualified borrower to a permanent modification after successful completion of a written modified-payment plan that was supposed to lead to permanent modification.
Foreclosing on a borrower prior to expiration of a written modified-payment plan that might have led to permanent modification while the borrower was meeting all the written plan's requirements.
Denying a loan-modification application that should have been approved.
Failing to offer loan-modification options as required by an applicable program.
Giving a borrower a loan modification with a higher interest rate than should have been charged under the relevant modification program.
Foreclosing on a borrower in violation of federal bankruptcy laws.
Failing to provide a borrower with proper notification during the foreclosure process.
Committing errors that did not result in foreclosure, but resulted in other financial harm.
Requesting reviews does not preclude borrowers from taking other actions related to their foreclosures.
Servicers are not permitted to require borrowers to sign waivers of the borrowers' ability to pursue claims against the servicers to receive compensation under review process.
More information is available at https://independentforeclosurereview.com.
Contact Alan J. Heavens
at 215-854-2462 or aheavens@phillynews.com or follow on Twitter @alheavens.
