Borrowers seeking a review of their foreclosures for errors committed by banks have been given an extra three months to apply for the free federal program, which may result in compensation.
Federal bank regulators said in a statement Tuesday that they have moved the deadline to July 31 from April 30 this year to encourage greater participation in the independent foreclosure review program.
Borrowers are eligible if the property in question was their main home, was anywhere in the foreclosure process during 2009 or 2010, and was foreclosed on by one of 14 financial firms that settled a bank regulator investigation into their foreclosure practices last April.
The 14 firms — all major providers of customer service on home loans — were required to hire independent consultants to identify borrowers injured by errors, misrepresentations or other mistakes. Those reviews are underway.
The settlement with the Federal Reserve and other regulators also entitled certain borrowers to make their own requests for independent reviews of their foreclosures for problems. If the review turns up financial injury, the borrower may receive compensation or another remedy.
The bank regulator settlement and foreclosure reviews are separate from the recent $25-billion settlement reached by five major banks, 49 states and several federal agencies. Borrowers compensated as part of the latter settlement may still seek to recover damages by using the foreclosure reviews.
A spokesman for the Office of the Comptroller of the Currency, the Treasury Department agency that regulates national banks and savings and loans, said the servicers sent letters to more than 4.3 million eligible borrowers by the end of December. As of Feb. 5, nearly 90,000 borrowers had requested reviews, a Federal Reserve spokeswoman said.
The OCC spokesman, Bryan Hubbard, said borrowers' complaints have involved such issues as the handling of loan modifications, mortgage balance discrepancies, timeliness of payments and improper fees.
Participating mortgage servicers include: America's Servicing Co., Aurora Loan Services, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, Everbank/Everhome Mortgage Co., Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, U.S. Bank, Wachovia Mortgage; Washington Mutual, Wells Fargo; and Wilshire Credit Corp.