Few Homeowners Have Requested Independent Foreclosure Reviews

Categories: Housing

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Once again, a good policy tainted by poor implementation.
By now, it's old news that many people lost or nearly lost their home because of banks' errors during the foreclosure crisis. A 2010 ProPublica analysis, for example, found that around a quarter of loan modification rejections occurred because the mortgage service provider couldn't find certain documents. Some homeowners reported that they never received modification denial letters. Others discovered that their home had been sold even while their loan modification remained pending.

So, in April 2011, the Federal Reserve ordered that a bunch of banks must retain an independent consultant to review potentially sketchy foreclosures. If a problem was found, the banks would be forced to compensate the homeowner. Anybody whose primary home was in foreclosure in 2009 or 2010 would be eligible.

The deadline to file a request is now less than a month away. In the year and a half since the program's inception, only 7 percent of eligible homeowners have filed a request. In California, that rate is 18 percent.

See Also: The Dispossessed: Bayview Homeowners Fight Foreclosures

At a press briefing last week hosted by New America Media, which reported the most recent statistics, housing advocates argued that the feds did a poor job reaching out to minority communities, which were disproportionately affected by the foreclosure crisis.

The outreach process for Independent Foreclosure Review consisted of mailers. According to the Office of the Comptroller of the Currency, which oversees the initiative with the Fed, more than 4 million letters were sent out explaining the program. Wronged homeowners could receive between $500 and $125,000 in compensation. And a few have the chance to get their house back.

Initially, the deadline was set for the end of July. By May, however, only around 4 percent of recipients had utilized the program. The deadline was extended to Sept. 30 -- and then it was moved again, this time to Dec. 31.

Housing advocates have complained for months about weak outreach efforts behind the foreclosure review initiative.

After all, many of the homeowners the officials are targeting are probably pretty hesitant to follow up on some paper they got in the mail claiming that they can get free money or a foreclosure rescinded just by filling out some documents. Many had likely been scammed before -- like Geary Brown, one of the subjects of our May feature story, "The Dispossessed":

In November 2010, he paid American Home Financing, a foreclosure assistance service, $3,500 to help get him a loan modification. The company told him to stop paying his mortgage until a representative got back to him, he says (American Home Financing did not answer several calls from SF Weekly). This was a common piece of advice: In many cases, banks only considered modification once a homeowner proved hardship. But American Home Finance never got back to him. (The Better Business Bureau has given the company an "F" rating.) Brown missed six straight payments.

Government officials seeking to help out struggling former homeowners are less persistent in their pursuit than were the predatory lenders who persuaded those homeowners to take on shady adjustable rate mortgages in the first place.


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lstrum
lstrum

After losing my job in early 2008 we did everything we could to continue making the payments on our home.  By late 2009 I had heard about the loan modification opportunity.  I researched everything I could find on it and realized we qualified and could keep our home at the reduced mortgage payment.  I sent everything the bank required and called every month for 14 months.  The first thing Wells Fargo did was update our account to say our income was twice what it was and sent us a loan modification letter changing the monthly mortgage amount to 1 1/2 times the amount we were struggling to pay.  After a couple months I was able to speak to someone and they corrected our records.  Wells admitted that they then lost our paperwork, sent it to a wrong department, lost it again and finally had found it once I reduced our payment to the amount calculated for a loan modification.  We started seeing people drive by our house and look at it from the street and I was finally able to speak to someone who would handle our request.  He told me they didn't do loan mods but we had at least 3 months before it would go to foreclosure so we had time to work on it.  The next day we received a letter from the banks attorney saying they were going to foreclose.  The day after that we received a letter from the county assessor saying the home would go up for auction in a couple months.  I talked to a realtor for a short sale amount, which Wells did not accept.  We couldn't afford to be locked out in winter so told the bank that we would move out.  Two months after the foreclosure the bank sold our house for $85,000.00 less than we owed and $45,000.00 less than the amount the realtor suggested as a short sale price.  In Nov 2011 I sent copies of all the correspondence to the "Independant Auditors".  The loss of our retirement home was more than I could take.  The consequence that won't be considered is that my health became so bad I am no longer able to work.  I see billions of dollars are going to fund state departments so they can better help those who are struggling now.  Each bit of news on this subject continues to relay that the homeowners who did nothing wrong or creative in buying their home but was affected by the greed of financial institutions causing the recession, is going to continue getting false hopes and screwed.           

teknoscribe
teknoscribe

I lost my home in a short sale right before the foreclosure deadline. The only bright spot was an open ended question on the Independent Foreclosure Review Form asking me to describe "any other way I may have been financially injured by the foreclosure process."After composing my response, I sent hard copies to the Independent Reviewer, the House and Senate Finance committees, and the chief executives of PNC. I also posted it on my website:

See http://www.desolationpress.com/essays/indreview.html

After a day or so of reflection, I thought it might serve as a good template for others to use.

See http://www.desolationpress.com/essays/testimony.html

I encourage people to complete the form, and send their story to members of Congress. A few truckloads of letters might give them a better sense of the magnitude of the issue.As they keep extending the deadline for this process, I'm starting to doubt that anyone will receive any real compensation for their loss. The banks have firmly established that they won't admit any culpability for their actions, so our best bet may be to publicly shame them into some sort of confession. Perhaps we should make them wait for a year or two before they receive their next taxpayer bailout.

sean.coffey52
sean.coffey52

ForeclosureHelpSCC is sponsoring a petition asking that the regulators extend the deadline until two months AFTER they have released the results of at least 215,000 cases.  The marketing for this program has been really poor (see a highly critical GAO report published in June). We believe that releasing the results of the cases would allow for far more homeowners to hear about the program through word of mouth.  If you agree, please sign out petition: https://www.change.org/petitions/postpone-the-deadline-for-the-independent-foreclosure-review-until-215-000-cases-have-been-released

cole_nat
cole_nat

You really want to stop a FORECLOSURE? I went toFinancial Screen Shots – got the link from stopforeclosurefraud com. Iordered the Loan Search Within 2 days I got back the info showing myloan was securitized. I order the full package of all My documents andit contained everything! I have absolute evidence my mortgage note wassold in 2008. I stopped paying 2011 and I am being foreclosed by Bank ofAmerica. My lawyer says they have absolutely NO STANDING and he plans tosue the lawyers bringing the case into court. I finally have BOFA in alie! More proof athttp://deadlyclear.wordpress.com/2012/03/15/securitized-distrust/Anyway, felt such a need to express myself. Good luck everyone.

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