As of May 31, regulators say that 338,447 foreclosures filed in 2009 or 2010 are scheduled to be reviewed for errors and possible compensation for homeowners, under the so-called Independent Foreclosure Review led by the Office of the Comptroller of the Currency (OCC).
That number represents only 8 percent of the 4.4 million borrowers who have received letters from U.S. regulators informing them that they could receive compensation from “errors, misrepresentations, or other deficiencies in foreclosure proceedings,” the OCC has said.
Regulators just released a compensation guide detailing how much a foreclosure victim is entitled, depending on a few factors.
For example, if a borrower was not in default and a foreclosure is in progress at the time of remediation, that borrower is entitled to $5,000 and correction of “servicer record for late fees, foreclosure fees, and/or any other improper amounts, and correct credit reports.”
But if the foreclosure was complete at the time of remediation, and a rescission of foreclosure is not possible, the borrower is entitled to a $125,000 payment “plus equity, remedy deficiency, and correct credit reports.”
If a foreclosure rescission is possible, the borrower is entitled to a payment of $15,000.
The OCC and Federal Reserve System refer to this outline as the “financial remediation framework,” or just “framework.”
Approved consultants will use the framework to recommend remediation for financial injury identified during the Independent Foreclosure Review.
The 14 large mortgage services targeted under the review will prepare remediation plans based on the independent consultants’ recommendations.
However, federal banking regulators must approve each servicer’s remediation plan.
Borrowers can visit www.IndependentForeclosureReview.com for more information about the review and claim process.