Mortgage lenders reviewing home foreclosures

Fourteen major U.S. mortgage lenders have started implementing reviews of home foreclosures between 2009 and 2010 looking for mistakes and illegal practices, in accordance with an agreement made in April between the banks and the Board of Governors of the Federal Reserve System as well as the Office of the Comptroller of the Currency. The reviews will be free of bias and conducted by independent consultants, looking for errors that could result in compensation for injured homeowners.

Borrowers who were in foreclosure activity between the designated time period can request a review if they believe the processors made an error, misrepresentation or other deficiency in the process. Paul Leonard, vice president of The Financial Services Roundtable's Housing Policy Council, said the review process will be thorough and could take a while to complete.

"Because the review process will be available to a large number of potentially eligible borrowers at the 14 participating servicers - and will be a thorough and complete examination of many details and documents - a review could take several months to complete," said Leonard.

Acting Comptroller of the Currency John Walsh said in a statement that independent consultants will look for errors and outline appropriate remediation if a problem is found.

“The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system,” Walsh said.

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